While homes in Coonamble, Bourke and Nyngan have mostly stayed high and dry in the recent floods, they still make the list of "most uninsurable" locations in NSW.

Back in 2009, pre the most recent flooding events, a Climate Council report found that regional communities were dangerously exposed to climate impacts which in turn affects costs around the insurability of infrastructure.

At the time, Bourke took the unwanted top spot with 95 per cent of addresses deemed “uninsurable”. According to the data modelling, at that time there were also more than 2000 uninsurable addresses in the Coonamble Shire which equated to around 70 per cent of residential properties. 

Nyngan and Cunnamulla, in outback Queensland, which also made the list, are expected to reach similar percentages by 2100.

All towns are nestled beside rivers and, although they share a history of flooding, the construction of major levee banks in the decades that followed has largely protected the townships from a succession of recent flood events.

What is "uninsurable"?

A property is defined as potentially “uninsurable” when climate risk is so high that insurers either refuse to offer cover or the annual premium is priced at or above one per cent of the cost to replace the property. This makes insurance so expensive it may as well be unavailable.

The listing of Coonamble, Bourke and Nyngan in 2019 data was based primarily on increased flooding risk.

Three years later, the latest Climate Council study shows that more than 80 per cent of us have experienced a disaster in the past five years, with the majority of affected people living in rural and regional areas. 

In November last year, the Daily Telegraph reported that in the future "more than three-quarters of Coonamble will be effectively 'red-lined' - the insurance industry term for refusing to offer a policy on a property simply because of where it is."

Local home owners reported to media that insurance costs have escalated. One resident's premium soared from $2000 to $10,000 a year.

Many have opted to waive expensive flood cover but argue that their properties have very low to no risk of being inundated and that insurance companies need to question the modelling supplied.

Rising premiums don't make sense to many when flood mitigation such as major levees have been so successful. Angry locals have posted on Facebook in protest.

"Why has Coonamble (insurance) risen? We don’t flood," one resident said.

Farmers also feel the brunt

The cost of farm insurance has also risen significantly due to natural disasters. A shrinking number of underwriters and inflation on equipment and labour have added to the burden.

Brokers are reporting premiums have increased between 20 to 40 per cent in recent times.

The National Farmers' Federation has voiced concern about the affordability of insurance for farmers.

Vice president David Jochinke pointed out farmers were already contending with inflationary pressures on machinery, which pushed up the amount of insurance coverage they needed.

"The affordability of insurance is a question and a challenge that farmers have to manage," Mr Jochinke said. "We're seeing machinery costs go absolutely through the roof, and the waiting time to get that machinery has also increased significantly over the COVID period. For us, it's an annual conversation and a line item in our budget that unfortunately has increased."

Narromine-based spray contractor Ben Burrell covers the central west and Western Plains of NSW, with three full-time staff.

"It's really scary because I simply can't operate without insurance," Mr Burrell told an ABC reporter.

Renewing the annual policy for his equipment and liability insurance has cost him over $55,000 for the year, and it is growing.

 Now for the good news

In late 2022, Bourke had fallen from unwanted top position to eighth on the "uninsurable" list and although Coonamble has dropped from second place to seventh, the number of 'high risk properties' has increased more than 75 per cent to 1995.

Floods are painful memories for many residents. There will still be a number of locals who remember the 1950 and 1955 floods that practically submerged whole towns and the 1974 flooding which also saw some homes underwater.

However the Coonamble levee bank that was completed in 1976 has never really been breached and, since it was upgraded and raised by half a metre in 2020/21, continues to provide a protective barrier around the town.

While the modelling does take account of other factors like soil movement from reduced rainfall, bushfires, surface water flooding and extreme wind, it has been confirmed that these are minor contributors in the "red zone" status of the western towns with riverine flooding considered the biggest risk.

Another report by the Australian Council of Social Service (ACOSS) has examined the cost and affordability of insurance both this year and in 2050, examining high and low emissions scenarios. Climate change will dramatically widen the gap between those who can and can’t afford to pay, the report finds.

Under a high-emissions scenario, where global temperatures increase by three degrees by 2100, affordability will worsen by one-and-a-half weeks for vulnerable households.

Under a low-emissions scenario, where global temperatures rise by less than two degrees, insurance affordability will worsen by more than one week (7.6 days) for vulnerable households.

“People on low incomes are impacted first, worst and longest by extreme weather events because they don’t have the same financial means to cope, adapt, and recover,” says Kellie Caught, ACOSS Climate and Energy Program Director.

Locally, under a high emissions future, half of the households in the Bogan Shire are forecast to spend more than two and a half weeks' income on home insurance, with the average premium expected to rise by 48.5 per cent to just under $3000 a year. Other Shires will follow a similar projection.Coonamble premiums could rise by 48 per cent and premiums in Warren by 47 per cent.

While these figures are not definitive, the possibilities of exorbitant insurance premium rise to Western Plains properties cannot be ignored.