Businesses in Halls Gap, in Victoria’s Grampians region, are facing an uphill battle to secure fire coverage as bushfire insurance becomes increasingly unattainable.
Just like the devastating recent and ongoing LA wildfires, the local situation can be attributed to the rising frequency and cost of extreme weather events driven by climate change.
Read more: Los Angeles wildfires on track to be the most expensive disaster in US history; insurers on high alert
With the area already prone to severe bushfires, many businesses simply can’t get insurance, while others are being forced to pay exorbitant premiums that exclude bushfire-related damages.
Grampians repeatedly affected
In the summer of 2023–24, bushfires devastated the Grampians, destroying homes and wildlife habitats while burning an area larger than Singapore. The Grampians were also affected in the Black Summer bushfires, and again this year.
Back-to-back fire seasons have heightened concerns about the region's insurability, as insurance companies increasingly refuse to provide coverage for properties in high-risk zones.
Local insurance brokers say some insurers are declining to assess properties individually, instead rejecting entire regions for bushfire coverage.
Situation worsening
Grampians Insurance Brokers director David Hosking described the challenges as worsening over the past decade.
Even buildings constructed with fire-resistant materials, equipped with hydrants and situated away from vegetation have struggled to secure coverage.
“The chances of some properties burning are virtually zero, but insurers still won’t take the risk,” Hosking told the ABC.
The lack of insurance options poses broader economic risks, as banks are often unwilling to lend to businesses without adequate coverage – and this in turn threatens the viability of the region’s tourism-reliant economy.
Government response
Federal representatives have acknowledged the issue, warning that towns like Halls Gap could face economic decline if businesses cannot secure adequate insurance.
The federal government has launched initiatives such as the Disaster Ready Fund and an insurance affordability taskforce aimed at reducing premiums and improving disaster resilience.
But industry experts say structural changes are needed, including encouraging multiple insurers to share risk in high-risk regions. Without these measures, businesses in disaster-prone areas like Halls Gap may face an uncertain future, with potentially severe economic and social consequences for the region.