Two of Australia’s largest insurers have suspended sales of insurance policies to fire-affected areas in New South Wales and Victoria.
Suncorp and IAG have put a temporary embargo on areas across both states in a move to stop people from panic-buying insurance at the last moment before their homes are destroyed, reported Financial Standard.
A Suncorp spokesperson said, “Insurance is intended to provide cover for unforeseen events. When a significant weather event is extremely likely or imminent, and therefore no longer unforeseen, insurers may put an embargo in place to stop accepting any new business, given the elevated risk.”
“This is common practice across the industry. There are exceptions for existing customers in certain circumstances, such as when you are buying a home. We are constantly reviewing areas that are embargoed and aim to lift restrictions once the imminent threat has passed.”
To date, Suncorp has received over 2,600 bushfire-related claims, with a total cost of between A$315m ($217m) and A$345m. IAG has received 2,800 claims with an estimated cost of around A$400m.