This paper argues that it’s time to start thinking strategically about how we can reduce future losses from natural disasters and aid victims in their recovery efforts. We should be asking fundamental questions about how private insurance and government assistance can be better leveraged to help communities recover.

The paper makes nine recommendations to strengthen the role of insurance for Australian disaster resilience including:
 
*establishing a regular dialogue between the insurance sector and state and federal governments to allow both sides to look at long-term disaster mitigation and recovery strategies

*encouraging governments and insurers to work to develop programs that enhance financial literacy as a way to reduce disaster losses and cost-effective ways for individuals to be financially rewarded for taking measures to safeguard their properties

* supporting mortgage lenders to require a property to have full insurance coverage against natural hazards and for this to be well enforced

* implementing the Henry Review on tax that specific taxes on insurance products be abolished

*embedding mitigation efforts with disaster assistance funding to reduce risk exposure for communities and insurers

* conducting comprehensive landscape assessments to ensure insurance premiums are based on risk and thus send a signal to people to reduce their vulnerability to major disasters

* urging the Council of Australian Governments (COAG) to commission a study on initiatives to enhance the take-up of insurance cover and examine various schemes to encourage resilience through insurance arrangements.

We need a new approach to financing the costs of natural disasters and encouraging those living in high-risk areas to be better prepared. The reality is that all Australian taxpayers will have to bear a share of this cost.

The authors are Dr Anthony Bergin and Edward Mortimer from ASPI, and Rachel Carter, Associate Lecturer in Law, Latrobe University.