One proposed solution includes government buybacks in high-risk areas like Lismore to prevent further development in vulnerable floodplains.

In Campbelltown City Council, the cheapest average home insurance still reflects a significant increase, now sitting at $1,929, which is a 68% rise over five years.

In response to these challenges, Independent MP Zali Steggall is proposing legislation for a National Climate Risk and Adaptation Plan to be updated every five years.

To combat rising insurance costs, the insurance industry is advocating for the establishment of national risk baselines to reduce risk and inform future development.

Alix Pearce from the Insurance Council of Australia points out that the Australian market is particularly vulnerable to extreme weather risks, which directly impacts insurance costs.

The average home insurance premium in Greater Sydney has surged to $3,200, reflecting a staggering 66% increase since 2020, according to data from Finity.

This rise in premiums is largely influenced by the 2022 floods, which were the second most expensive catastrophe in the last 50 years, particularly affecting high-risk areas.

Michael Spencer emphasizes that escalating insurance costs are pushing vulnerable populations into higher-risk climate areas, raising significant equity concerns.

Despite Australia having a high level of insurance coverage, rates of uninsurance and underinsurance are climbing, particularly in flood-prone regions where only 23% are adequately insured.

Research from CSIRO indicates that investing in climate resilience can lead to substantial savings in recovery costs, with the Albanese government allocating $27.4 million for climate risk assessment and adaptation planning.

The increase in reinsurance costs, which rose by 30% last year, is also contributing to higher premiums as these costs are passed on to individual policies.

Certain regions, such as Northern Beaches and Ku-ring-gai, have seen premiums nearly double over the past five years, while Sutherland Shire premiums have increased by 87%.