INQUIRY INTO INSURERS’ RESPONSES TO 2022 MAJOR FLOODS CLAIMS - House of Representatives Standing Committee on Economics

Untitled INQUIRY INTO INSURERS’ RESPONSES TO 2022 MAJOR FLOODS CLAIMS House of Representatives Standing Committee on Economics 5 July 2024 ABA submission to the Inquiry into insurers’ responses to 2022 major floods claims The Australian Banking Association (ABA) welcomes the invitation to provide a submission to the Inquiry into insurers’ responses to 2022 major floods claims led by the House of R. [...] We provide the following responses to the Committee’s questions to the ABA: Q1: How banks are incorporating the higher risk profiles insurers are applying to properties, particularly for flood risk, into their own risk profiles, and Q2: Actions banks are taking to monitor insurance cover as part of their requirements for taking out and maintaining a mortgage, and any actions taken in response to m. [...] For example, a bank may remind the customer of their insurance obligations under the mortgage contract and work with the customer to support the customer to reinstate their insurance policy. [...] Factors that banks consider include: • The amount of equity available in the home • If the home loan involves lenders mortgage insurance • The scale of the damage (non-structural, structural, or total loss) • The value of the insurance cash settlement received • A customer’s repayment history • Evidence of the customer’s desired plan (re-build, repair or relocate) • Whether the customer has experi. [...] To assist customers with understanding the process that banks may follow on cash settlements, the ABA has published a fact sheet (see Appendix) on insurance cash settlements after natural disaster, available on the ABA website.4 The ABA and our members also publish communications materials via online platforms and local news outlets to notify communities of the assistance banks can offer to help c.