Insurers promise to reduce premiums if governments better manage land

An expensive but necessary step: "We need to get cracking and fix up the landscape."

APRIL 2028 – Insurers will lower premiums in bushfire-prone areas where state-controlled bushland is actively managed to reduce the risk of intense bushfires and homes comply with the latest bushfire safety ratings.

The move is expected to slash household premiums by half over the next three years but will cost state and federal governments up to $3 billion a year in land management and subsidies to households.

The announcement by Australia’s peak insurance body comes a year after a significant increase in premiums across eastern Australia left 90 per cent of residents in communities adjoining national parks unable to afford to insure their homes.

House insurance premiums across the eastern states rose by three times following catastrophic bushfires in 2025. Some insurers refused to sell policies to residents living near bushland prompting outcry from communities and governments.

At the time, the federal minister for regional development argued insurers had a moral obligation to offer affordable policies: “Insurance is the backbone of Australia’s disaster preparedness strategy,” she said.

However, the Insurance Council said insurers had no choice: “Insurers have paid out more than $10 billion in claims in the past two years. If the rate of disaster events does not abate, we will be out of business completely.”

Yesterday’s announcement results from a 12-month consultation between the government, residents, native title holders, insurers and builders in Queensland, New South Wales and Victoria. 

“It’s been hard work, and expensive,” the federal government’s lead negotiator told reporters. “But something has to change. We need to get cracking and fix up the landscape.”

Find out more

Home insurance affordability and socioeconomic equity in a changing climate, Actuaries Institute

California insurance market rattled by withdrawal of major companies, Associated Press

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