Automotive insurance claims to top 20,000 following record deluge in Queensland and NSW
Thousands of written-off vehicles as a result of record flooding in south-east Queensland and northern NSW last week are increasing the already unprecedented demand for used vehicles and long waiting times for new vehicles.
Some areas of northern NSW received record rainfall in previously saturated catchments in the three-day storm that ended on February 28, leading to record river heights, flooding in previously unflooded areas and a significant spike in property and motor insurance claims.
Figures supplied to carsales by the Insurance Council of Australia reveal total insurance claims have increased from less than 10,000 to more than 70,000 in Queensland – and from less than 5000 to more than 40,000 in NSW – since the last day of summer (Feb 28).
As of yesterday, the total number of insurance claims in both states for 2022 stood at 118,016, following a nine per cent increase in new claims.
That translates to an estimated $1.77 billion worth of damage.
As of yesterday, motor vehicle claims tallied 9431 in NSW and 10,050 in Queensland for a total of 19,481 – up 16 per cent.
That figure is expected to increase as more insurance claims are made and more vehicles are written-off, with many still lying where they were swamped and waiting for assessment.
According to the RACQ, more than 90 per cent of affected vehicles are being deemed write-offs.
Suncorp Group’s executive general manager of motor claims Anna Cartwright told carsales the insurance giant has received more than 6000 motor claims across Queensland and NSW directly as a result of the floods.
RACQ claims general manager Trent Sayers told the ABC it has received more than 2000 motor vehicle claims from car owners affected by the floods, most of them from Brisbane’s inner city and northern suburbs, which is significantly more than the 780 vehicle claims received by the insurer after the 2011 floods.
“In comparison, this recent weather event involved a lot of storm-related flash flooding and some unexpected riverine flooding,” Sayers told the ABC.
The increase in number of written-off vehicles, many of which may end up on the used car market, has also led to warnings for second-hand car buyers.
“In a market like this one where there is a shortage of new car stock, where used cars are not plentiful, if the deal looks too good to be true it probably is,” Motor Trades Association of Australia (MTAA) CEO Richard Dudley told the ABC.
“Take great care and make sure you try and find out the history of the vehicle, where it has come from, who serviced it.
“We have seen cars that have been impacted on the east coast with the floods turn up in Western Australia.”
With used car demand already at record highs – used-car internet searches surged another six per cent in February – and many used car yards on the east coast also flooded, Dudley said replacement cars will be hard to find.
He added that hire cars will also be in high demand because of the new-vehicle stock crisis that already existed due to the global semi-conductor shortage and will be further impacted by the Russia-Ukraine conflict.
The deluge of flooded cars will likely also push up already record prices being paid in the used-car market, with thousands of flood-affected motorists now looking for replacement vehicles.
Many of those looking to purchase new vehicles will be forced to join the queue. The average waiting time for a new vehicle is now between three and 12 months, which some industry experts say is the longest since WWII.
There is some relief for vehicle owners affected by the floods, however.
The NSW and Queensland governments have offered relief for motorists either living in or visiting locations such as south-eastern Queensland and parts of NSW that have been declared a national disaster area.
For example, driver’s licence replacement or registration plate replacement may be free, while fees associated with cancelling the registration of, in this case, a flood-damaged written-off car may also be waived.
The registration transfer fee of a replacement vehicle for one that was written off may also be waived. Click here for more details on the disaster relief offered in NSW, and here for south-east Queensland.
Meantime, Hyundai Motor Company Australia (HMCA) yesterday donated $100,000 to the Australian Red Cross to assist with ongoing flood relief efforts in Queensland and NSW.
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Keyword: East coast floods to exacerbate new and used car shortage