A senior claims expert says a lack of insurance may have encouraged some Victorians to make a fatal decision to stay and fight the Black Saturday fires.

Speaking at the ANZIIF bushfire liability discussion in Melbourne last week, LMI Group Claims Consultant Graham Cox attacked the heavy taxation of insurance which he says is a critical factor in Australia’s underinsurance burden. His comments followed an Insurance Council of Australia (ICA) claim that up to 28% of homes lost in the fires were not insured.

Mr Cox says insurance taxes make premiums unacceptably expensive for many rural residents, even where they are aware of the risks.“We handled losses for [members of] the Country Fire Authority,” he said. “The first four had no contents insurance.”

Many rural businesses were also caught short, with many lacking business interruption cover or holding only limited coverage. Mr Cox says many businesses in fire-prone areas had no business interruption insurance.

Power failures on Black Saturday meant supermarkets with stock worth up to $80,000 were at the mercy of their policies, which may not have included cover for consequential loss.

Mr Cox says government assistance programs are “understandable”, but do little to solve Australia’s underinsurance problem. “We need to be teaching people that they need to be insured rather than getting free handouts all the time.”

He told insuranceNEWS.com.au the industry needs to drive the underinsurance issue forward. “I’ve been at meetings where everyone is in agreement but when it is asked who is going to lead, everyone stayed quiet.”