A new national poll indicates that a large share of Australian homeowners are questioning whether they can maintain home and contents insurance as premiums rise in response to extreme weather, raising concerns about the protection gap in the domestic market.
A YouGov survey commissioned by the Climate Council canvassed 1,508 Australian voters between Jan. 14 and Jan. 22, 2026, including 1,081 respondents with home and/or contents insurance. According to the poll, 54% of insured participants are concerned that events such as bushfires, floods, and severe storms could make home insurance unaffordable or unavailable where they live. Almost half (46%) of those with home or contents cover reported that their premiums have already increased because of extreme weather. One in five (22%) policyholders said they are likely to consider going without insurance if premiums continue to rise alongside climate-related risks. The findings come as the Insurance Council of Australia (ICA) reports recent natural peril losses. The ICA said that extreme weather events in 2025 generated almost $3.5 billion in insured losses from about 264,000 claims nationwide. Natural catastrophe costs are contributing to higher reinsurance and capital expenses, which in turn are reflected in retail premium rates.
The Climate Council noted that affordability concerns are emerging against a backdrop of underinsurance and non-insurance. In 2023, about 5.1% of Australian households were assessed as underinsured and about 3.3% had no insurance, representing more than two million people without full financial protection for their homes and contents. The latest poll also explores reasons why some households remain outside the insurance system. Among homeowners without cover, 65% identified cost as the main barrier. For renters, 53% cited cost as the principal factor preventing them from taking out contents insurance. For insurers, brokers, and underwriting agencies, the figures point to a possible widening of the protection gap if climate-related hazard trends and price pressures persist, particularly in higher-risk regions where risk-based pricing is more pronounced. The results also raise questions about product design, mitigation measures, and engagement with government programs on resilience and land use.
Climate Councillor and economist Nicki Hutley said the survey results reflect a tension between rising physical risks and household budgets. “An ever-growing number of Australians are finding themselves caught between an insurance rock and a climate hard place. Families know their homes face greater risk from climate-fuelled disasters, and those same risks are helping drive insurance costs – and insurance itself – out of reach as more Australians struggle to pay their premiums. It’s a blunt reminder that climate pollution is already costing us – as more disasters anywhere, drive up costs everywhere – and those costs are growing,” Hutley said.
Climate Councillor and infrastructure expert Janice Lee said recent seasonal patterns again demonstrate the exposure of residential assets to weather-related events. “Unfortunately, this summer is another reminder that more and more often we’re seeing wild and unpredictable weather that burns and floods houses. The costs of these events, driven by climate change, hurt families, impact the value of homes, and create additional cost of living pressure. In 2025, Australians paid up to $700 more for home and contents insurance premiums than in 2024. Reducing climate pollution is critical to Australia’s economic security. Either we invest early to avoid climate change tipping points, or we pay for constant repair and adaptation, with ordinary Australians footing the bill,” Lee said. For the insurance sector, the comments refer to the relationship between emissions trajectories, physical risk, and insurance affordability. They are similar to themes raised by supervisors and investors regarding how insurers integrate climate scenarios into pricing, capital planning, and portfolio management.
The 2026 results are consistent with earlier research on public expectations around climate risk and government policy. A separate YouGov poll released in August 2025 for the Climate Council and the Climate Action Network, also based on a sample of more than 1,500 Australians, found that 77% of respondents want the federal government’s climate plan to aim to limit risks from extreme weather events such as bushfires. That poll reported that this view was shared across the political spectrum, with around three in four major party voters giving similar responses. Only 13% of respondents said the federal government should do less to limit the impacts of climate‑fuelled extreme weather, while 61% said the government should do more on climate change.
The 2025 survey was released as the Productivity Commission warned that damage from escalating extreme weather poses a risk to Australia’s productivity, and that investment is needed both to reduce emissions and to protect homes and infrastructure. It also came ahead of the Albanese government’s expected announcement of a 2035 climate target, with seven in 10 Labor voters in that poll indicating support for a strong target. Among Generation Z respondents, 68% expected the government to adopt a strong 2035 goal.
For insurance professionals, the latest polling points to several operational and strategic issues:
At the same time, the research indicates that many voters favour national climate and resilience measures that could, over time, influence hazard exposure and claims variability. Industry participants may face ongoing engagement with governments and regulators over the balance between risk-based pricing, any targeted support mechanisms, and investment in mitigation that can reduce both losses and premiums in vulnerable communities. Taken together, the survey findings indicate that climate risk, insurance affordability, and coverage gaps are likely to remain important considerations for Australia’s general insurance market in the coming years.
