“People aren’t opting out of insurance. They’re being priced out.”
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That is the warning from ARC Justice chief executive Damian Stock as rising insurance premiums leave some Greater Shepparton residents questioning whether they can afford to protect their homes or even purchase them in the first place.
The latest warning follows a rising tide of concern from leaders that areas such as Shepparton might become “uninsurable” and also from the Insurance Council of Australia, after the industry lost hundreds of millions of dollars in the wake of the 2022 flood.
ARC (Advocacy and Rights Centre) Justice’s 2026 Impossible Decisions report found 40 per cent of people interviewed were either uninsured or underinsured.
Mr Stock said households without cover could face a financial catastrophe if another disaster struck.
“Without cover, people are constantly living in anxiety … every time it rains,” he said.
Mooroopna resident Bianca Dyball knows the strain of being left without affordable flood cover.
Her home was severely damaged in 2022, with water sitting in the house for 10 days.
Ms Dyball said she received no insurance payout after her insurer argued the damage was caused by a drainage issue rather than flooding.
When she eventually found another insurer, she said flood insurance alone cost more than one third of her annual income.
“I don’t have that,” Ms Dyball said.
Local couple Evelyn and Bob (not their real names, for privacy reasons) said this was becoming a familiar story.
The elderly couple said they knew people who had reduced their cover, questioned whether to renew their policies or stopped their insurance altogether.
“If ordinary people can’t afford insurance any more, what are they meant to do?” Bob said.
Their own premium increase is becoming increasingly difficult to manage.
“We’re okay at the moment. But if it keeps going up, we couldn’t afford it,” Evelyn said.
Victorian Council of Social Service director of policy and research Jonathon Gurry said insurance was a major barrier in increasing flood resilience.
“Insurance is a big part of the problem ... especially in Shepparton, which has been ranked by independent analysis as one of the most at-risk places in the country for homes becoming effectively uninsurable.”
VCOSS is calling on the state government to introduce a resilient homes program, with Mr Gurry saying improving flood resilience could make insurance more affordable.
“If the government de-risks an area, it makes it more attractive for insurers to actually go in and bargain,” he said.
Greater Shepparton City Council manager for emergency management and resilience Belinda Conna said reducing risk also meant recognising that not every property faced the same level of flood exposure.
“It's unfair that you could label a whole municipality or a postcode as being uninsurable without really understanding the individual household level,” she said.
“It isn’t really fair that these houses that have undergone these planning controls are considered the same circumstance as potentially a house that could be generations old,” Ms Conna said.
The Insurance Council of Australia said insurers generally assessed risk at an individual property level rather than applying one price across an entire postcode.
It also said said areas exposed to severe and repeated flooding could become unaffordable for some households.
“Greater Shepparton has first-hand experience of this challenge,” the spokesperson said.
The insurance council reported that the 2022 flood generated $736 million in insured losses across 22,151 claims.
The spokesperson said resilience measures could be taken into account, although insurers differed in how those measures affected premiums.
“The only sustainable way to improve affordability is to reduce the underlying risk,” the spokesperson said.
The insurance council has called for a $30 billion flood defence fund, jointly funded by the Commonwealth and states over 10 years, with the Goulburn River catchment identified as a priority.
It has also called for Victoria’s 10 per cent stamp duty on home and contents insurance to be removed to reduce the cost of cover.
Mr Stock said insurance companies need to increase transparency so residents could understand why their premiums were changing.
He added that there was no single solution to the region’s insurance and housing resilience challenges.
“There’s much, much more to do,” he said.
“Communities can’t do this on their own. The council can’t do it on its own. Neither can the Victorian Government nor the Federal Government.
“It requires all of us to be looking at this challenge together.”