Midge Cohen is facing the threat of an early cyclone season without any building insurance for her home in central Queensland.
Despite the risk, the insurance is a luxury the 49-year-old Rockhampton woman and her 82-year-old pensioner mum simply cannot afford.
They are among an estimated 11 per cent of Australian home owners exposed to catastrophic loss with no building cover, according to a 2020 Australian Competition and Consumer Commission report.
In Queensland's north, the proportion of the uninsured is even higher at 17 per cent due to the high cyclone threat, which has pushed more premiums into the unaffordable range for those on limited incomes.
Barely surviving as cost of living pressures mount up
Ms Cohen's household, which also includes her teenage son who has autism, is barely surviving now on her carer's allowance, her small income from two cleaning jobs, and her elderly mum's pension.
"The cost of living, with electricity, food, petrol is just phenomenal," she said.
"Even just car insurance, health insurance, pet insurance. I'm going to end up having to cancel my health insurance because it's 40 bucks a month and it keeps going up and up and up.
"You got nothing left at the end of the month."
As she sits on her front stairs, Ms Cohen looks back with concern at the small high-set timber home that still bears the damage from Cyclone Marcia in 2015.
"We had water coming down through the walls and roof and when the government officers came around, they go, 'Oh, that's a pre-existing condition' and wouldn't fix it," she said.
"Before that cyclone, we had major heavy downpours and not a drop through the roof."
She walks around the rundown cottage and despairs about the estimated $100,000 in repairs she needs to fix the roof and veranda.
Desperate times for people priced out of insurance cover
Ms Cohen's plight is one that Sharanjit Paddam, co-author of the Actuaries Institute's 2022 green paper on Home Insurance Affordability, said was increasingly likely as people in high-risk areas were further priced out of insurance.
Mr Paddam said while non-insurance was a growing concern in cyclone zones, under-insurance was also rife.
Affordability pressure is rising in part due to increased premiums brought on by more frequent extreme weather events, such as the devastating east coast floods that swamped southern Queensland and northern New South Wales earlier this year, resulting in $5.4 billion in damage payouts from about 230,000 insurance claims.
The Home Insurance Affordability paper reports northern Queensland and northern Western Australia pay the highest amounts for building coverage, with annual home insurance premiums more than $3,000, mostly due to exposure to cyclone risk.
Amanda Baker, whose Yeppoon home copped damage from Cyclone Marcia in 2015, has just changed insurers and increased her cover after shopping around for a better deal.
"We had the house insured for a $590,000 rebuild and I was paying monthly about $190," she said.
"We now have the house insured for $600,000 and the payments are down to $168 a month. That's a big saving."
Ms Baker was concerned the chronic shortage of builders and skilled tradespeople in the region was delaying attempts by property owners to repair and improve homes in time for another potentially destructive weather event.
"It's just a nightmare," she said.
Labour shortage causing long delays
Mr Paddam said the labour shortage was nationwide, but there were other ongoing issues driving up construction costs.
"We are struggling having enough builders and qualified people," he said.
"But it's complicated because the supply chains for all sorts of products that builders need, including steel and timber and concrete, the prices have been going up significantly from the global inflation issue that we're seeing.
"And also because of disruptions in the supply chain, especially in China."
He urged home owners, particularly those in high-risk areas, to check if they had adequate building cover.
"The cost of rebuilding has gone up so much over the past five years," he said.
"People may find that they thought they had enough insurance, but they need to actually increase that. It's definitely a problem we're seeing all across Australia at the moment.
"[Under insurance] means you can't build back the house that you currently have. It may mean you lose a couple of bedrooms, or you don't get what you need."
No relief yet from $10b cyclone insurance pool
The much-vaunted $10 billion Northern Australia Insurance Pool began operating on July 1 but any premium relief there for cash-strapped home owners is some way off.
Insurance Council of Australia general manager public affairs Mathew Jones said insurance companies were just starting the process of buying into the pool and the impact on cyclone-area premiums would not be known until the end of 2024.
Mr Jones said the best method of lowering insurance costs was to reduce risk.
He was heartened by the federal government's $1 billion over five years from 2023 (up to $200m per year) to invest in measures that better protect homes and communities from extreme weather before it happens through the previously announced Disaster Ready Fund.
