Australia is approaching the 2026–27 bushfire season with a complex risk picture.
Recent rainfall has improved conditions in some regions, while others remain comparatively dry. In some areas, rainfall has also encouraged vegetation growth that could become additional fuel as temperatures rise and vegetation cures.
For property insurers, brokers and businesses, there is no single national bushfire outlook. Risk needs to be understood regionally — and ultimately at individual property level.
But there is another issue that deserves equal attention.
Bushfire exposure isn’t simply about whether a property will burn. It is about what happens afterwards.
A major event can combine widespread property damage with construction inflation, labour shortages, supply-chain disruption and catastrophe-driven demand surge.
That makes bushfire as much a reinstatement risk as a physical damage risk.
A different picture across Australia
Current conditions vary considerably by state.
Victoria enters the warmer months following a mixed winter. While statewide rainfall was above average, conditions varied significantly by region. The Bureau of Meteorology is forecasting warmer conditions and below-average spring rainfall across Victoria, while increased fire potential has been identified in parts of the state.
For underwriters, the focus should be increasingly local: vegetation, fuel loads, topography, water supply, emergency access and separation from bushland.
New South Wales experienced its warmest winter on record. While winter rainfall was slightly above average statewide, dry conditions have persisted in some areas and increased spring fire potential has been identified across northern and south-eastern NSW.
This reinforces the importance of looking beyond broad catastrophe zones. Grassland, forest and peri-urban exposures can behave very differently even within the same region.
Queensland experienced a significantly drier winter, with statewide rainfall around 24% below average. Increased fire potential has been identified in south-east Queensland.
Grassfire exposure is particularly important. Commercial and industrial properties do not necessarily need to sit beside dense bushland to experience significant fire risk. Large areas of cured grass can support fast-moving fires capable of affecting properties some distance from traditional bushfire zones.
South Australia presents almost the opposite picture, recording an exceptionally wet winter.
That doesn’t necessarily eliminate future fire risk. Strong rainfall can encourage substantial vegetation growth. If that vegetation dries as temperatures increase, it can ultimately create additional fuel.
For underwriters, the critical question becomes how vegetation develops and cures as summer approaches.
Tasmania recorded below-average winter rainfall overall and its warmest winter on record, with increased fire potential identified across parts of the state.
Reinstatement deserves particular consideration in Tasmania. Geography, contractor availability and reliance on interstate or overseas supply chains for some materials and specialist equipment can potentially extend rebuilding periods following widespread losses.
Western Australia presents another varied picture. Rainfall and vegetation growth can create substantial grass and fuel loads which become increasingly relevant as conditions dry.
WA is also a reminder that rainfall alone isn’t an adequate measure of bushfire risk.
Fuel quantity and fuel condition matter just as much.
In the Northern Territory, significant vegetation growth and grass fuel loads remain important considerations. For properties outside major population centres, access to firefighting resources and emergency response times can also materially affect the exposure.
The fire is only the beginning
For property insurance, the physical hazard is only one part of the potential loss.
Consider a commercial property insured for $10 million.
The question isn’t simply whether $10 million represented a reasonable replacement value when the policy was placed.
The question is:
Will $10 million still be enough if hundreds or thousands of properties are trying to rebuild at the same time?
That is where demand surge becomes important.
Following a major catastrophe, everybody suddenly needs builders, engineers, electricians, plumbers, demolition contractors, plant, steel, timber, concrete and transport.
The result can be increased costs and significantly extended rebuilding times.
And this is occurring against an environment where construction costs have already been rising and skilled labour remains constrained.
Underinsurance can become the hidden catastrophe exposure
Declared values therefore deserve particular attention before summer.
Businesses and brokers should consider whether current values adequately allow for demolition and debris removal, professional fees, regulatory upgrades, construction escalation, specialist machinery, freight and the additional costs that can emerge following a catastrophe.
Simply rolling forward an old valuation using standard annual indexation may not always capture the true cost of rebuilding a complex commercial property.
Where average or co-insurance provisions apply, that difference can become particularly important.
A major catastrophe is the worst possible time for a business to discover its declared values have not kept pace with its true reinstatement exposure.
Time matters too
There is another number on the policy schedule that should be challenged:
The indemnity period.
An isolated property fire and a regional catastrophe are very different events.
Following a widespread bushfire, contractors may be managing dozens of projects. Engineers and consultants can become stretched. Planning approvals can take longer. Specialist machinery may have substantial overseas lead times.
Then the property still needs to be rebuilt, equipment commissioned and the business returned to its pre-loss trading position.
Twelve months can disappear remarkably quickly.
For complex commercial and industrial businesses, even a 24-month indemnity period should not automatically be assumed adequate.
The appropriate period needs to reflect a realistic worst-case recovery scenario.
Bushfire underwriting shouldn’t become postcode underwriting
Geospatial data, bushfire mapping and catastrophe modelling have transformed insurers’ ability to understand natural hazard exposure.
But they should support underwriting rather than replace it.
Two properties only kilometres apart can present completely different risks.
One may have excellent vegetation management, substantial separation from fuels, reliable firefighting water, non-combustible construction and clear emergency access.
Another may have vegetation against the boundary, combustible external storage, limited water and constrained access.
The postcode might be similar.
The risk isn’t.
That is why risk surveys remain important.
At Australasia Underwriting, surveying significant property exposures helps move the conversation from identifying the hazard to understanding how an individual property might actually respond to it.
Three conversations before summer
For brokers and property owners, three conversations are worth having now.
Review the exposure. Understand the individual property’s vegetation, construction, access, water supply and mitigation rather than relying solely on a postcode or catastrophe score.
Review the values. Challenge whether buildings, contents, stock and plant values realistically reflect what reinstatement could cost following a major regional event.
Review the recovery period. Consider how long the business would genuinely take to rebuild and return to full operation if contractors, materials and infrastructure were under pressure.
Nobody can predict precisely what the 2026–27 bushfire season will bring.
But insurance isn’t about predicting the next catastrophe. It is about making sure the business is prepared if one occurs.
For bushfire-exposed properties, that means looking beyond the flames.
Because the real test of a property policy isn’t simply the limit printed on the schedule.
It is whether the insurance programme provides a realistic pathway to rebuilding the business after a major loss.
At Australasia Underwriting, the focus is on understanding the individual risk — the exposure, the protection, the values and the pathway to reinstatement.
Understand the risk. Challenge the values. Plan the reinstatement.
