Australian insurers and intermediaries are urging households to reassess their home and contents cover as bushfire and grassfire threats rise across southern states.
New consumer research from comparison service iSelect indicates that many homeowners may be inadequately insured or unprepared ahead of the peak bushfire season. iSelect’s December 2025 survey found that 41.3% of Australians surveyed said they did not need to prepare for the threat of bushfires this summer because they were confident their home was not at risk, or they were not prepared at all and likely would not have time to prepare.
iSelect spokesperson Sophie Ryan said that while physical safety remains the primary concern in at-risk areas, the recent pattern of extreme heat and fire conditions has renewed focus on policy coverage and limits. “Don’t wait until fire is at your doorstep. Review your policy and make sure you’re covered for bushfire damage. Too many households assume they’re protected, but exclusions and limits can leave you exposed,” Ryan said. She noted that terms and conditions for bushfire-related losses can differ between insurers and products. “Home insurance coverage varies when it comes to bushfires, so check for exclusions like ember damage, or consider adding total replacement coverage for extra peace of mind,” she said.
Ryan also said that customers seeking to arrange cover shortly before or during a severe weather event may face restrictions. “For those without cover, it’s crucial to understand insurers often place embargoes on new policies to prevent people from buying insurance when risks are elevated or a disaster is approaching and then cancelling cover after the risk passes. We know households are struggling financially, and insurance premiums are a significant cost, but in times like this, ask yourself if you can afford not to have at least some form of cover,” she said.
IAG – whose brands include NRMA Insurance, CGU, WFI, and Rollin’ – is advising customers in South Australia, Victoria, and southern New South Wales to prepare homes and review emergency plans as temperatures climb. IAG meteorologist and senior weather risk analyst Kathryn Turner said a mild heatwave affecting those regions is expected to intensify to extreme between Thursday and Saturday, heightening the risk of dangerous bushfire conditions. “Extreme bushfire ratings are in place for parts of South Australia and Victoria. As dry and gusty winds travel from the northwest and combine with extreme temperatures, we’re going to see optimal bushfire conditions towards the end of the week. Fires can spread rapidly and even jump natural and man-made barriers such as roads, rivers, and firebreaks. Embers carried by the wind can travel many kilometres ahead of a fire, so communities well outside the direct path can still be affected,” Turner said.
IAG’s “Severe Weather in a Changing Climate” report has identified a trend toward more frequent and intense bushfires in southern Australia, linked to hotter, drier conditions and shifting rainfall patterns that contribute to more fire-supportive landscapes. IAG executive manager property claims fulfilment Scott Lindsay said that, from the insurer’s perspective, emergency planning and household-level mitigation are an important part of managing bushfire risk and potential losses. “The threat of bushfires isn’t just for regional or rural communities. More people than ever are living on the bushland-urban interface, putting millions of Australians at risk of bushfires across metropolitan areas. It’s imperative Australians know how to protect themselves and to prepare their homes if disaster strikes. With temperatures set to climb, ensure it’s safe to be outdoors and check on elderly or vulnerable neighbours who may need assistance preparing. Safety is always the number one priority; that means having a well-stocked emergency kit, a bushfire survival plan, and staying up to date with local emergency services,” Lindsay said.
After the January 2025 Los Angeles wildfires, IAG research recorded increased awareness of natural perils, with nearly 90% of Australians and New Zealanders indicating they planned to take proactive steps to protect their home and contents from bushfires and other extreme weather events. Lindsay said events such as the Los Angeles fires and the December 2025 bushfires on the New South Wales central coast have been cited within the group as examples of the type of events that may be addressed through coordinated mitigation measures by governments, insurers, and communities.
RACV is issuing similar messages in Victoria, with a particular emphasis on grassfire exposure and the adequacy of sums insured for homes and vehicles. The Australasian Fire and Emergency Service Authorities Council’s (AFAC) Summer 2025 Seasonal Bushfire Outlook indicates an increased risk of grassfires in Western and Central Victoria, as well as increased grassfire and bushfire risk for the South-West, Western, Central, North-Central regions, and South-West Gippsland. AFAC has linked the outlook to recent rainfall trends that have temporarily supported vegetation growth in southern parts of the state while leaving underlying dryness in place, especially in the north and Gippsland. The Country Fire Authority (CFA) notes that grassfires can ignite easily and, under certain conditions, spread at speeds of up to 25 kilometres an hour, with properties on the urban fringe and in regional areas with unmanaged long grass or debris near structures facing higher exposure.
RACV head of policy James Williams said the organisation is advising Victorians to review their insurance settings against current replacement costs and local risk. “Our priority is making sure Victorian families are properly protected if the worst happens. We’re encouraging everyone to review their insurance now – to ensure they have adequate insurance protection for their homes and vehicles,” Williams said. RACV has recommended that customers check that home, contents, and motor policies are current, review coverage limits and exclusions, and use building and contents calculators to reassess sums insured. The organisation also echoes CFA guidance on risk reduction, including mowing and clearing long grass, removing leaf litter and debris from roofs and gutters, relocating flammable materials such as woodpiles and stored fuel away from homes, maintaining clear access for emergency vehicles, and using tools such as the VicEmergency app alongside local fire danger ratings to stay informed.
For insurers, brokers, and underwriters, the combined messaging from iSelect, IAG, and RACV reflects ongoing industry concerns about underinsurance, policy understanding, and how physical risk reduction intersects with insurance affordability in Australia’s bushfire and grassfire landscape.
