At Holistic Insurance, our highest priority is community. 2020 as a whole has challenged Australians to a level we have never seen before. Between the bushfire crisis of summer and the ongoing COVID-19 saga, Australian’s have demonstrated time and time again how it is the spirit of the community that can help us find resilience during the most difficult times.

Scott Wilford, CEO and Founder of Holistic Insurance & Risk Solutions, said Australians might have another challenge thrown our way before this year is over. The Bureau of Meteorology raised its El Niño-Southern Oscillation Outlook to La Niña ALERT status from the previous WATCH status, meaning the chance of a La Niña occurring this year has increased to 70 per cent, roughly three times the average likelihood. 

La Niña typically means:

  • Increased rainfall across much of Australia
  • Cooler daytime temperatures (south of the tropics)
  • Warmer overnight temperatures (in the north)
  • A shift in temperature extremes
  • Decreased frost risk
  • Greater tropical cyclone numbers
  • Earlier monsoon onset

La Niña is caused by several factors, including changes in the surface temperature of the tropical Pacific Ocean. This may result in torrential rain, floods, cyclones and storms on land, all of which can have a significant impact for communities and businesses.

The presence of La Niña also increases the chance of widespread flooding. Of the 18 La Niña events since 1900 (including multi-year events), 12 have resulted in floods for some parts of Australia, with the east coast experiencing twice as many severe floods during La Niña years than El Niño years one. Typically, some areas of northern Australia will experience flooding during La Niña because of the increase in tropical cyclone numbers.

In the warmer half of the year, southern coastal locations such as Adelaide and Melbourne experience fewer individual daily heat extremes during La Niña years but an increased frequency of prolonged warm spells. Of the Victorian heatwaves between 1989 and 2009, 17 occurred during La Niña years.

Australia’s most recent La Niña event was from April 2010 to March 2012. According to BOM analysis, 2010 and 2011 were the third-wettest and second-wettest calendar years on record for Australia, with 703 mm and 708 mm respectively recorded, both well above the long-term average of 465 mm2. This period, which began in November 2010 and continued until January 2011, included the Brisbane floods, as well as other substantial floods in parts of New South Wales, Victoria, Western Australia and Tasmania. 

With a 70% chance of a La Niña event on the horizon, it’s essential to act now. We urge customers to check insurance policies to ensure there is adequate cover, especially for flood as it may be excluded under standard wordings. This mostly applies to customers purchasing home and contents or landlord insurance via direct insurers and for businesses most insurance covers offered by direct insurers or brokers exclude flood, Wilford said. 

“Customers should also to assess and update their sums insured. Make sure to review not just the rebuild sum insured, but also the limits for contents, removal of debris, including any asbestos removal and business interruption coverage, should the worst happen.”

“It’s about being prepared and understanding your exposure, whether that relates to a private residence or a commercial or industrial occupancy you can do things to reduce risk,” explained Wilford.

If you haven’t engaged an insurance broker, the time is now. The insurance sector is seeing the most challenging market conditions in decades, with insurers being risk-averse and premiums increasing across most product lines. We even see Insurers reduce cover or pull out of markets altogether. Now with the additional threat of La Niña, you don’t want to find out the hard way that your insurance policy doesn’t cover you correctly. 

Having a broker on your side helps make you more savvy about risk management in your business. It’s a proven way to ensure you have sufficient cover for your risk exposure, leaving you to get on with what you do best – running your business.