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How the Interplay of Disaster, Housing Crisis, and Underinsurance can Aggravate Inequality: The Case of Cyclone Ilsa


Most communities along Western Australia’s northwest coast appear to have dodged a bullet after Cyclone Ilsa made landfall overnight. While some structures, such as the Pardoo Roadhouse, were damaged, the destruction was less than we feared.

But alas, there will be a next time. Climate change is predicted to lead to increasingly severe and frequent weather events and disasters.

As those in recently flooded areas of New South Wales and Queensland know, rebuilding and recovering from disasters takes a long time. And alarmingly, our resilience is undermined by the housing crisis, underinsurance and poor planning.

The issues may conspire to exacerbate inequality. It means that vulnerable populations are hit the hardest when disaster strikes.

Read more: Is your neighborhood underinsured? Search our map to find out

Disasters, housing and underinsurance

The cost of housing puts many people in financial stress. Many Australians have little or no money to spare probably don’t have insurance. This makes them extra vulnerable if a disaster strikes.

Tenants are among the least insured. This means they may struggle to afford replacement housing if their home is hit by a disaster.

Research I co-authored has revealed tragic story after tragic story of people who realized too late that they were uninsured, or that their insurance levels were too low to cover the costs of rebuilding their lives after a disaster.

A national housing shortage means options can be limited for both renters and homeowners looking for alternative accommodation after their home has been damaged by a disaster.

Increasing the housing supply can solve some of these problems. However, inadequate planning can lead to housing projects in disaster-prone areas such as flood plains. It can also lead to environmental degradation, leaving homes and communities more exposed to disaster.

Coastal ecosystems such as the mangroves in northern Australia, for example, can Reduce the effects of storms. They slow down the speed and size of waves and stabilize soil and sediments and can provide some protection to nearby settlements.

But development for housing or infrastructure near coastal areas can endanger these ecosystems.

Insurance for such homes and communities can become unaffordable or out of reach due to disasters worsen.

Add to this the tyranny of distance faced by people living in remote and rural Australia, and we see more and more people and communities at risk from the social and financial impact of disasters in the age of climate change.

During the 2019-2020 Black Summer wildfires, community centers provided a place to camp, restrooms, showers and supplies to those in need, including clean drinking water.

Failure to address this mix can exacerbate inequality

If left unchecked, our current housing crisis combined with climate change could see more and more people living in the kind of slums and tent cities that we saw around the time of the Great Depression.

We risk turning back the clock on the gains made in improving urban quality of life. This will further stretch the contentious social services sector and governments’ ability to ensure community resilience.

An important aspect of resilience is narrowing the gap between rich and poor, recognizing that people and communities recover better when they can work together.

So any action we take should be aimed at social justice and involve coordination between the three levels of government.

Planning must respond to the relationship between disasters, housing and insurance.

This includes a systematic and equitable effort to move communities out of high-risk areas. It means protecting ecosystems that in turn help protect communities.

It also means that new housing is safe, affordable, insurable and located in safe places, designed to withstand local risks.

Read more: Underinsurance entrenches poverty as the vulnerable are hit hardest by disasters

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