A Path to Stability: Expert Pushes for Insurers to Adopt Total Replacement Coverage
A Path to Stability: Expert Pushes for Insurers to Adopt Total Replacement Coverage
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
In recent deliberations with the Federal Government, seasoned industry advisor John Trowbridge highlighted a significant gap in the current home insurance model.
During a session excavating the depths of insurance processes following the catastrophic floods of 2022, Trowbridge advanced the conversation towards a systemic solution for chronic underinsurance—a shift to full replacement insurance policies.
At the core of the issue, Trowbridge emphasized, is the prevalent dependence on clients to select their own sum insured. This widely adopted practice across the insurance industry often leads to imprecise coverage levels and exposes homeowners to substantial financial risk when calamities strike. The key anxiety for consumers lies in accurately anticipating reconstruction costs, a task that many find challenging and imposing. Trowbridge argues against the industry's attitude of absolving itself from verifying coverage adequacy, illuminating the dire repercussions faced by those enduring disaster with insufficient insurance.
In a written testament to the inquiry, Trowbridge stoutly advocated for broader availability of full replacement insurance options. A transition he posits would not overly burden premiums given the relatively infrequent nature of total loss incidents. "It should only make a negligible impact," he assured the investigative panel.
Trowbridge opened the floor to considering regulatory shifts to compel insurers to adopt such practices. However, he acknowledged the complexity of reaching effective solutions to what he identifies as a prevalent and unreasonable problem.
The discourse shifted momentarily to the insurance sector’s response post-Canterbury earthquakes, noting New Zealand's departure from full replacement policies as reinsurers eyed more predictable outcomes. Trowbridge countered this hesitation with an argument for the Australian insurance and reinsurance market's adaptability, drawing parallels to the unanimity achieved in introducing mandatory flood coverage years past.
Some providers, including AAMI, maintain such full replacement offers, pointing to feasible paths ahead. What may seem an onerous task for insurers and their reinsurance partners is, according to Trowbridge, a matter of confronting the same challenge with renewed resolve.
As the inquiry continues, the Economics Committee of the House of Representatives hears diverse perspectives, ranging from consumer advocates to industry representatives. In the coming months, the committee aims to ground its findings with on-site visits to regions thrashed by floods, understanding the real-world aftermath and insurance landscape.
The ultimate goal is to crystallize observations and recommendations by the end of September, laying down firm tracks for policy shifts and industry practices that may finally mitigate the insidious underinsurance that plagues Australian homeowners.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
Safe Work Australia’s latest Key Work Health and Safety Statistics, released on 12 October 2026, provide a fresh reminder that construction remains one of the country’s highest-risk work environments. The national data records 41 construction worker fatalities in 2025 and shows construction accounted for 11.7% of serious workers’ compensation claims in 2024-25, making the figures directly relevant to trade businesses reviewing safety systems, contracts and insurance arrangements. - read more
A damaging hailstorm across Victoria’s Mallee has turned a promising harvest into a difficult insurance and cash-flow test for affected grain growers. ABC Rural reported on 6 November 2026 that hail swept through districts including Birchip, Wycheproof and Quambatook, damaging thousands of hectares of wheat, barley, lentils, canola and other crops just as many paddocks were ready to harvest. - read more
A recent Australian Financial Complaints Authority decision has highlighted a difficult but common issue for strata communities: damage that happens during a storm is not always insured storm damage. The dispute, reported on 5 November 2026, involved an owners corporation claim for a collapsed parapet wall, with the insurer declining cover on the basis that defective design, materials or workmanship were the dominant cause rather than the weather event itself. - read more
A new Australian healthcare professional liability market update points to a sharper divide between general insurance market conditions and the experience of healthcare organisations arranging malpractice and professional liability cover. Lockton’s 1 November 2026 update says established insurers remain selective, claims inflation is affecting attachment points and underwriters are looking more closely at how clinical governance works in practice, not merely whether accreditation exists. - read more
Western Australia’s updated Working With Children Check laws are a timely reminder that fitness business risk is not limited to physical injury, equipment damage or venue incidents. The changes, in effect from 17 September 2026 and highlighted by AUSactive in October, mean certain adverse Working With Children outcomes from other Australian jurisdictions can now affect a person’s ability to work with children in WA. - read more
For self-employed Australians, the financial stability provided by consistent income is the backbone of both personal and business success. Unlike traditional employees, who might have access to sick leave or employer-sponsored disability benefits, self-employed individuals are solely responsible for their financial security in the event of illness or injury. This is where income protection insurance steps in as a crucial safeguard. - read more
Income protection insurance in Australia is subject to rules covering insurer stability, product disclosure, sales conduct, claims handling and dispute resolution. Understanding the roles of APRA, ASIC, AFCA and key policy documents can help you compare cover more confidently. - read more
When life takes an unexpected turn, whether due to illness, injury, or other unforeseen events, the financial repercussions can be devastating. This is where income protection insurance becomes an essential component of maintaining financial stability. Income protection insurance acts as a safety net, ensuring that even in times of hardship, your financial obligations can be met, and your standard of living maintained. - read more
In the face of life's unpredictable twists and turns, few things are as disconcerting as the possibility of suddenly losing your ability to earn an income due to illness. Such events are often unexpected and can have significant financial repercussions that interrupt not only your flow of daily life but also compromise your future plans. - read more
Income protection insurance claims involve more than lodging a form. In Australia, claimants usually need to show they meet the policy definition of disability, provide medical and income evidence, complete the waiting period and keep the insurer updated while benefits are assessed or paid. - read more
Knowledgebase
Term Life Insurance: A life insurance that provides a cover for a specific period of time - usually one to five years or until the insured reaches age 65 or 70.
No comments yet. Be the first to share your thoughts.