Cyclones and natural disaster insurance

Cyclones (hurricanes) are just a collection of storms that have got organised into a circular movement (due to the earth’s spin) with a falling central air pressure that is sucking in moist air from the surrounding area. Big tropical storms form over warm sea temperatures, during the ‘wet’ or ‘monsoon’ season, when air humidity is high.

The planet wind map, developed by Cameron Beccario, is a beautiful animation of the world’s winds.  It clearly illustrates the clockwise pattern of the Southern Hemisphere’s air pressure systems and the anticlockwise movement of low pressure systems in the North.

Only northern Australia is directly affected by cyclones, because they run out of energy when sitting over lower sea temperatures and once over land.  Australia’s official cyclone season runs from around December to April each year, however cyclones are most common in the peak rainfall months of February and March.

Every cyclone is different. Different size (spread), intensity, speed of movement and path of travel.  Generally, the stronger the cyclone, the easier it is for weather bureau staff to now predict the exact path of travel, well in advance, using computerised modelling.  For example – the precise path of Cyclone Larry was predicted more than a week beforehand.  Others, like this year’s very weak Cyclone Dylan, wander around like lost chooks; speeding up, slowing down, veering this way then that.  A good analogy is to think of a ball rolled along the ground hard or gently – the latter doesn’t have enough energy to travel in as straight a line or for as long.  Stronger cyclones will have a very distinct ‘eye’- a central area relatively cloud-free and calm – easily visible on a satellite image.

Tornado winds are much more destructive than most cyclonic winds, due to the vicious twisting action.  The damage caused by a Townsville tornado that lasted just ten minutes, a couple of years ago, was astonishing.  Native and well-suited trees cope relatively well with a consistent though very strong wind from one direction; but a twisting wind snaps limbs and twists trunks in the blink of an eye.  Houses in the direct path of a tornado are usually completely trashed.  Tornados are rare in Australia, but rarely predicted in advance.  The only upside is that tornados are narrow and short-lived.

The much-overlooked reality is that Northern Australia, and especially inland Australia, relies on cyclones to bring much-needed rainfall.  In particular, cyclones travelling south over Queensland’s Gulf of Carpentaria often turn into good rain depression systems and bring welcome rainfall to western Queensland.  And cyclones crossing the coast above Western Australia’s Port Hedland will often track rain across parched Central Australia.

Cyclone intensity is measured on a scale of 1 to 5.  A category 1 cyclone is similar in strength to a typical northern inland thunderstorm, with wind gusts around 100 kilometres per hour.  The main difference is that a typical inland wet season storm will last around an hour, and typically bring 25-75mm, whereas a cyclone is larger in size so lasts much longer.  Sometimes with exceedingly heavy rain (300mm upwards), but sometimes rainfall is surprisingly light.  The longer cyclonic winds are around, the more weakened man-made structures and trees become.  This is what made Cyclone Yasi exceptional – huge size. Strong winds lasted for around 18 hours in Townsville – though a long way from the centre.  Thousands of trees were felled or damaged beyond recovery, due to the hours of strong wind.  Houses in good repair are not damaged by a category 1 or 2 cyclone.  Category 5 cyclones can wreck even solid houses.  All it takes is for one window, door or roof airvent to blow in, then the roof goes, then the house falls to bits.  But the probability of a particular house in a given area being hit by such a strong cyclone, is actually quite low.

A very well respected cyclone research facility is based right here in Townsville –  the Cyclone Testing Station at James Cook University.

Houses in North Queensland have to be built more strongly than houses in Southern Australia.   Roof strength is the main key, so these days, iron rooves have to be fixed to battens at much more frequent intervals, and screwed down rather than just nailed.  All windows now installed have to have a higher wind rating.  However it is very disappointing that some incredibly easy and blindingly obvious cyclone-damage prevention measures have not been undertaken.  Where’s the local and state government spine?   Simple but very effective measures include the banning of all tiled rooves, tinny garden sheds, flimsy window awnings, and legislation ensuring commercial signage is built to a certain strength. Tiled rooves are eminently unsuited to areas of strong winds, because tiles are not fixed securely enough. Lose one tile, and the lot peels off. The worst thing is that these tiles then become airborne missiles that punch holes in downwind buildings.  This was perfectly illustrated when brand new houses lost their tiled rooves in Cyclone Larry.  Tinny garden sheds and weak window awnings blow away in category 2 winds, and become very dangerous airborne hazards.  After every cyclone, towns are littered with commercial signage that has been blown about. The first little pig’s house would be rated more strongly than most business signs.

Why does this matter? Apart from the fact that these flying objects become missiles that could injure or kill neighbours and damage their property?  And this extra environmental pollution could be fairly easily avoided?  Unfortunately many Australians now view insurance as their own bank money.  Need a new pair of sunnies or sandshoes?  Claim it on your health insurance, to ‘get some of your money back’.  Need a new shadesail?  Leave the old one up when a cyclone is coming, and the insurance company will give you a brand new one to replace the mouldy old one which got shredded because you ‘forgot’ to take it down.  I know of a well-known business person who got an insurance company to install stainless steel security mesh in place of nylon flyscreens.  And a raft of other post Cyclone Yasi insurance-related rorts.  Which we are now all paying for, by way of skyrocketing premiums.  Frustratingly – some of the people squealing loudest about the rising insurance costs, are those whose hands have been in the till most often.

There is only one way forward, regarding insurance affordability.  I insure my house for a calamity. In case it blows away or burns down.  I don’t cough up thousands of dollars each year, so I can claim on a burnt-out washing machine motor or a camera I dropped in the sea.  And I sure as hell don’t want to be funding anyone else’s frivolous claims.

The wailing and teeth gnashing over rising insurance premiums has been deafening, with money squandered on talk-fests, when simple solutions are very obvious:

1.  The Queensland state government must ditch stamp duty payable on all insurance policies. What government in it’s right mind, places a charge on people taking responsibility for their own welfare? Madness!  Would governments rather people became completely financially dependent on the state, when hit by a disaster?  (And why the silence regarding the booming stamp duty revenue, due to rising insurance premiums?)

2. The Federal government must ditch the ‘terrorism’ levy added to all business insurance policies. Why on earth should struggling small businesses be milked to provide a service that if vitally required, is the responsibility of every Australian?  Or is all that talk about caring about small businesses, the backbone of the country, just hot air?

3. Insurance companies must ditch all the automatically included frills and return to offering bottom-drawer basic – and affordable – policies.  Should a householder’s goods be covered for theft if left on their unsecured verandah? Is it sensible for a garden ‘shed’ you could cut with a butter knife, to be covered by a general insurance policy, in coastal northern Australia?  Wouldn’t it be smarter to have these much higher risk extras, as pay-as-you-go optional add-ons; and have a vastly cheaper, basic ‘we’ll rebuild your house if it burns down or blows away’ policy?  To encourage home and contents owners to take some responsibility for their own welfare?  As it is, there’s zero incentive.

4. It’s now possible to take out a home insurance policy with a much higher claim threshold, thus resulting in a much lower – and more affordable – annual premium.  However it seems it’s not possible to take out a small business policy with a claim threshold. Why?  Do insurance companies want to encourage people to claim for the computer printer someone dropped their coffee on?

4. And the blindingly obvious solution, other than rising claim thresholds, are regular (say – every 6 or 10 years) building inspections.  I’d jump at the chance to pay a building inspector a few hundred dollars to assess the condition of my house, including the roof, windows, doors, stairs, screens, paintwork etc.  Because the cost of a written assessment would be more than repaid via reduced annual insurance premiums.   Rating all houses via an in-person inspection service, prior to policy payment, would also help alleviate the bedlam that ensues after a widespread natural disaster such as Cyclone Yasi.  Many people had to wait a long time for assessors, or were even asked to just assess damage themselves, or by builders quoting to do the ‘repairs’ (“foxes in charge of the chook cages” situation, if ever there was one!) It would also avoid brown paper bags changing hands to ‘rebuild’ rural sheds and verandahs that didn’t exist at all, pre-cyclone.

At present people making an effort to maintain the structural integrity of their homes are subsidising those who are living in houses whose rooves and walls are held together by rust particles and termites holding hands, and others too idle to clean up their backyards when a cyclone is predicted.

5. Lastly – local governments need to show more spine. Don’t allow building development to continue on floodplains.  There’s two good reasons for this.  The first is that Australia has little enough good food growing land – floodplains are our most fertile and usually well-watered horticultural land.  (Sydney, are you listening?).  Secondly; there’s only one reason why coastal land surrounded by steep hills, is very flat. It’s due to the levelling action of water.  (Mackay and Cairns Councils, are you listening?)

Many of the above insurance-related points also relate to homes in southern Australia at risk of flooding and bushfires.  Is your timber home surrounded by overhanging gum trees and long grass?  Are you building a flat-on-the-ground house on a floodplain?  Should people who park their car out in the open on a day when well in advance, severe hailstorms are predicted, get a new car from their insurance company when theirs is written off? Should others be struggling to subsidise your choices?  What can be done to avoid disaster?

Everyone needs to be reminded – insurance companies are businesses.   If they don’t make a profit, they go broke.  They aren’t charities growing money under their office desks.  Do our local, state and federal government representatives have what it takes to fix Australia’s insurance woes?


PS:  I have written an earlier blog post regarding trees which handle cyclones well (and which don’t): “Which trees survive cyclones”