Homeowners underestimate Australia’s flood exposure and most are reluctant to pay higher premiums to reduce costs for those at risk, but there is support for improved planning measures and defences, research released by Youi finds.

About 37% of survey respondents own a property exposed to potential flooding, but only 8% know that more than 2 million Australian homes face some risk and 53% estimate fewer than 1 million homes are exposed.

Two-thirds of respondents without a perceived flood exposure are unwilling or unsure about paying higher premiums to improve cover affordability for people in flood-prone areas.

Where there is willingness to pay more, most would contribute up to $300 extra per year on their premiums.

The survey involved more than 1200 homeowners who bought insurance in the previous 12 months. It aimed to explore the fairest ways to keep communities safe and make insurance more affordable.

About 40% of respondents rank limiting development in flood-prone areas as the top priority for reducing impacts; 20% favour building defences and 10% want insurance subsidies.

Only one in 10 respondents selected educating and encouraging homeowners to make properties more resilient as the most important action to reduce flood impacts.

Youi says the results indicate the most effective way to improve affordability and resilience is to introduce measures directed at reducing or avoiding exposure, rather than relying on subsidies.

CEO Nathaniel Simpson says building a fairer, more resilient future requires a shared effort from insurers, governments, industry and communities.

“We all have a role to play in helping Australians better understand their risk, take practical steps to reduce their exposure and prepare for the impacts of flooding,” he said.

“The more informed we are, the better equipped we’ll be to protect not only Australian homes, livelihoods and communities, but also save lives.”

A Climate Council report released last October found the nation has more than 2 million flood-prone homes, with Queensland and NSW the most exposed areas.