Eventually figures will be collated to reveal how many homes destroyed in the Victorian fire disaster were uninsured. Recovery will then depend on many factors, including public goodwill and help from the government.
We can expect a growing percentage of uninsured homes in the months - and possibly years ahead. The first thing that happens in hard times is that household expenditure is examined - and discretionary spending is cut.
When the insurance premium renewal comes in some will review it as " non essential " and reluctantly drop their insurance cover. A factor that will have a bearing on such a decision is the heavy imposition of the Fire brigade levy in the premium.
That raises another question. The people who insure are paying to maintain the fire brigade, but all householders share the benefit. The fire brigade does not only turn out to save insured homes !
The uninsured are getting a free ride and because of that those who are insured are paying an artificially high premium. If the premium were lower, obviously more people would be inclined to insure their homes.
Perhaps the emphasis on fire protection costs should not be added to insurance premiums, but levied against all households on an equal basis - and that could be achieved by making fire insurance a component of municipal rates.
There would be a huge advantage of removing insurance as an optional decision and providing cover to all homes through automatic rate cover. The pool of contributions would be higher, and as a consequence the individual charge would be lower.
When the Royal Commission begins investigating the Victorian tragedy the matter of insurance cover should be high on the agenda. Universal fire, flood and storm insurance would let many sleep more soundly even in hard economic times !
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