There appears to be a sound argument for increased funding for mitigation and the sharing of responsibility across governments, households, and insurers. However, important questions remain relating to mitigation as constituted by a broad array of protection, preparedness, and resilience initiatives, ranging from traditional flood prevention levees, to the retrofitting of houses. On the one hand, conventional protection measures, such as flood levees, align with long-standing maladaptive insurance logics, promising to enhance insurability through a reduction in the risk of flooding. On the other hand, mitigation measures designed to enhance community and household resilience, such as retrofitting, face considerable barriers from an insurance industry that is both unwilling to invest in pre-disaster preparedness (thus the burden of financial responsibility falls on individual householders), and is largely unwilling and/or unable to price resilience in premiums. We explore this in a critical examination of existing and proposed mitigation projects in Australia, along with mitigation recommendations outlined in government reports and relevant academic literature.
Floods: Hard Mitigation Measures
Proactive state government responses to flood impacts has resulted in education campaigns encouraging households to better protect themselves through property retrofits, maintenance and preparation, emergency response plans, and building and utilizing social connections (Queensland Government 2017). Yet for some households, the capacity to reduce disaster risk is beyond their control. Government investment in hard mitigation measures can instead alleviate vulnerabilities. In 2011 and again in 2012, for example, up to 444 houses were inundated by flood waters in Roma, Queensland. As a result, a USD 12 million flood mitigation project, stage one of the Roma levee, was completed three years later, protecting 483 houses from 1-in-100 floods (Urbis 2014). Along with the 4.9 cost–benefitFootnote 4 calculated over 50 years, a ratio comparable to flood risk reduction activities internationally (Shreve and Kelman 2014), the levee’s construction has reopened household access to previously denied insurance coverage, while reducing premiums for around 1400 households by 30%, or as much as 80% for high-risk households (Coppel and Chester 2014; Urbis 2014). The levee stands to substantially reduce both the broader community’s collective trauma and the physical, mental, and emotional strain households endure during and after disasters to maintain or rebuild the physical fabric and feel of their homes and their everyday lives (Whittle et al. 2012; Dixon et al. 2015). However, we note the residual risk implications in the context of climate change increases for flood probabilities.
Greater financial commitment by governments to flood mitigation would likely see an increase in similar hard mitigation measures, including the long-awaited South Rockhampton Flood Levee in Queensland. The levee—proposed 25 years ago—would provide flood protection to 1000 homes that have recurrently been isolated by floods for weeks rather than days. During the 2010–2011 floods, households lost water and electricity supplies, were placed at risk by compromised sewerage systems, and lost access to homes, schools, and businesses due to 179 road closures. In an area with high levels of socioeconomic disadvantage, many households were “financially destroyed” and insurance remains a barrier to resilience due to unavailable or high insurance premiums (Rockhampton Regional Council 2013, p. 12). The proposed levee would offset the USD 30 million cost of raising the Bruce Highway, which is flooded during 1-in-10-year floods, severing road access to central and north Queensland and costing USD 60 million in State economic losses in 2011 alone. Despite the USD 50 million recently spent by all three tiers of government on flood repairs over four years, the South Rockhampton Flood Levee project has remained unfunded given the USD 37–44 million price tag (Rockhampton Regional Council 2013; Strelow and Holmes 2015). Funding the project would provide households with protection from regular flooding and access to affordable insurance coverage. It would intercept current disaster and insurance mechanisms that are socially and financially marginalizing many households.
Combined with the variegated patterns of noninsurance, disasters often entrench place-based disadvantage (O’Hare et al. 2016; Booth 2018). Many socioeconomically disadvantaged communities are located in disaster-prone areas across Australia. The capacity of these households to reduce risk is often beyond their control, as no feasible level of household retrofitting or property maintenance could notably reduce flood impacts. Only government funded mitigation measures can sustainably lower their physical risk and reopen access to insurance systems (Coppel and Chester 2014; DAE 2017). While the benefit from such hard mitigation measures are directly felt by households initially, in time these measures would benefit society more broadly, as fewer high-risk households enter insurance pools, reducing premiums (assuming savings are passed on to consumers).
Cyclones—Subsidization of House Infrastructure
Key to reducing cyclone impacts is property retrofits. The importance of improving building strength is evident from post-1980s building stock constructed in accordance with stringent wind-loading requirements. During Cyclone Yasi, only 3% of post-1980 buildings sustained damage, compared with 12% of buildings built pre-1980 (King et al. 2013). For this reason, responsibility for mitigation measures has fallen to households. But retrofit options are not cheap. The cost to strengthen roofs, doors, and windows—building features most commonly damaged in cyclones—is estimated between USD 8361 and USD 40,370 per house, with variations dependent on retrofit aesthetics and permanency. Urbis (2015) calculated the cost–benefit ratios for different retrofits, varying between 1.1 (over-batten roofing over a 5-year period) to 12.9 (roof strapping over a 4-year period). In addition to longer-term financial savings (and increased property values), retrofits should reduce current unsustainable household insurance premiums. As with flooding, this approach should also result in further discounts for insured households due to reductions in insurance claims (TAGT 2015). While the argument for household mitigation is financially sound, the outlay required by households is in many cases prohibitive.
Unlike flood or bushfire impacts, the force of wind cannot be mitigated through hard measures (with the exception of reducing debris). Consequently, managing cyclones attracts little financial support beyond education campaigns and emergency response. At risk households are therefore disadvantaged compared with households facing floods and bushfires. The previously disregarded TAGT (2015) recommendation for household mitigation subsidies, and research funding for more cost-effective and aesthetic retrofits, could alleviate the financial burden, particularly for lower-income households. It would allow more households greater physical protection and access to more affordable insurance. The TAGT (2015) recommendation for education campaigns, designed to “improve cyclone preparedness could be the most effective way to reduce the number of minor claims” (Urbis 2015, p. 8). Minor claims after Cyclone Yasi accounted for 86% of claims and 29% of insured losses. Research estimates the proposed education program would save households on average USD 225–566 in damages, offsetting program costs with a 3.2–14.9 cost–benefit, and reducing reliance on insurance systems (DAE 2017). Together, mitigation subsidization, research, and education campaigns could contribute to a more equitable and stable insurance system, as well as a reduction in debris, collateral damage, and demands on emergency services (TAGT 2015).
Bushfires—Retrofitting Properties
Current bushfire mitigation measures are well-rounded and established, with emphasis on community engagement, development restrictions, building regulations, hazard reduction strategies, and emergency response. Such strategies are reflected in the Victorian State Government’s (2011) response to the 2009 Victorian Bushfires Royal Commission’s (Teague et al. 2010) recommendations, over a quarter of which directly support households in preparation and response. However, the Commission’s recommendations for fireproof landscaping and safety measures for existing buildings did not consider the financial and time costs required from households.
Current estimates for property preparations range between USD 6600 and USD 34,800 (averaging USD 18,200) (Penman et al. 2017), with an average of USD 7400 for initial outlays and USD 740 per annum for maintenance costs (Penman et al. 2016). While a well-prepared home increases the likelihood of a property surviving a bushfire, the above studies found that the financial and labor costs of preparations and/or retrofits are beyond what many households are willing or able to pay. Penman et al. (2016, 2017) suggest that for households who accept responsibility for their own risk, a shared-investment property mitigation scheme and case-specific information could positively improve household resilience. The latter is important, given that many residents struggle to apply generic bushfire advice to their property (Penman et al. 2017).
Supporting households to undertake property improvements will become more important in future insurance contexts. Unlike floods and cyclones, risk-pricing for bushfires is only now beginning to be calculated in insurance premiums, as bushfires have previously been considered a negligible risk (King et al. 2013). This change is likely the result of insurance administrative costs, population growth, and asset increase in high-risk areas, the rising frequency and intensity of high-fire-danger-days, improvements in risk mapping, and the capacity of insurers to encourage households to take responsibility for their own risk (Teague et al. 2010; Booth and Tranter 2017). As with cyclones, financial support for household retrofits are envisaged to counter future insurance increases, contribute to greater community resilience by reducing fire risk in adjoining areas, and assist the sustainability of insurance systems by limiting future claims. More broadly, mitigation measures can reduce the traumatic experiences of survivors and firefighters and the associated short- and long-term consequences (Caruana 2010; Eriksen 2014).
Current Barriers to Household Mitigation Measures
In line with shared-responsibility frameworks, households are being encouraged to become more self-sufficient and accept greater responsibility for their risk management. However, expectations around household contributions and how these actions can be communicated are commonly based on standard assumptions about household capacities and behaviors. Most strategies assume households have the physical and mental capacity to understand and implement mitigation measures. However, in many instances, this is not the case (Eriksen 2014; Sword-Daniels et al. 2018). Older people in remote areas of Australia, for example, have been found at higher risk of cyclone impacts due to their physical inability to clear gutters and a lack of social support (Astill and Miller 2016). Australian programs, such as AIDER (Assist Infirm, Disabled and Elderly Residents), provide services that support at risk communities, but resources and geography provide significant barriers to outreach.
Strategies for reducing risk, including adequate insurance, are also built around the assumption that households will act as rational agents. They assume that households have the time and financial capacity to implement and maintain measures, understand and accept the hazards and risks they face, and appreciate the long-term value of mitigation investments (Craik et al. 2012; Penman et al. 2016). They also assume that higher-income households are more likely to invest in mitigation due to the availability of funds. In reality, there are few points of traction within the life cycle of a house where substantial changes to a property are made, such as property purchase, rebuild, and insurance purchase and renewal (O’Connell et al. 2015). This is particularly true for landlords who have legal restrictions pertaining to property access, as do tenants with regard to the implementation of measures (Bird et al. 2013; O’Hare et al. 2016).
Barriers to greater mitigation investment that influence decision making at all levels of government permeate through to decisions at the household level. Barriers, regardless of the level at which they operate, will need to be addressed if strategies are to be successful, and to avoid further disadvantaging marginalized groups.