Fires are raging out of control in Victoria’s north and VicEmergency has ordered residents near Bungil, Granya and Thologolong to leave immediately. Southern Australia is enduring its most intense heatwave in years – a dangerous convergence of conditions that is sharply escalating risk for insurers and their customers.
Firefighters also facing challenging conditions in South Australia as temperatures surge into the 40s across multiple days. Some areas are facing consecutive days over 40°C as extreme heat combines with hot, dry and windy conditions to drive extreme fire danger.
The Victorian State Control Centre earlier warned that severe to extreme heatwave conditions are expected to persist until Saturday, with temperatures climbing into the mid 40s broadly across the state before peaking on Friday – levels not seen since the 2019 summer heatwave.
An extreme heatwave warning has been issued by the Bureau of Meteorology for the Northern Country, North East, East Gippsland, and West and South Gippsland districts, while the rest of Victoria is under a severe heatwave warning. Total Fire Bans (TFBs) are in force for the Wimmera, South West and Central districts, with Extreme Fire Danger Ratings in place and High Fire Danger Ratings elsewhere.
In the north east, a bushfire that ignited in Mt Lawson State Park on Monday spread to hundreds of hectares, with aerial tankers and ground crews battling difficult terrain and a forecast northerly wind change.
“It is really important people take the actions needed to protect themselves and their family from both the heat and elevated fire danger today. Have your bushfire plan ready to go and be prepared to leave early,” State Response Controller Garry Cook said.
With temperatures tipped to reach up to 45°C in some locations and little overnight relief, the unfolding situation is ringing alarm bells across key insurance lines.
For home and contents and strata insurers, the immediate concern is bushfire, ember attack and smoke damage to properties in and around high risk districts, including the north east and Gippsland. Even where homes are not directly burnt, smoke, ash and soot can drive building and contents claims, while power outages linked to heat and fire may trigger claims for food spoilage and power surge damage, subject to policy terms.
Commercial property and business interruption exposures are also rising. Any escalation in fire activity or expansion of evacuation and closure zones could see more businesses facing direct damage, smoke contamination, or denial of access – with potential impacts where wordings include closure by authority or prevention of access extensions.
Rural and farm portfolios are particularly exposed in the affected regions, with heightened risk to fencing, pasture, fodder stores, sheds, machinery and livestock. TFBs increase liability exposure for any negligent ignition from farm or contractor activity, raising potential third party property and injury claims.
The extreme heat itself is a parallel concern for health, life, personal accident and workers’ compensation lines, as vulnerable individuals and outdoor workers face increased risks of heat related illness and accidents.
With fire conditions expected to deteriorate further before any cool change, insurers and brokers are likely to step up real time communications with customers, reinforce bushfire and heat safety messaging, and closely monitor accumulations across high risk postcodes as southern Australia sweats through a perilous run of days.
