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BUSHFIRE LOSSES MAY RISE

Posted On: Dec. 14, 1997 12:00 AM CST

SYDNEY, Australia -- Bushfires that have burned about 700,000 acres in New South Wales so far are expected to cost Australian insurers less than $10 million Australian ($6.7 million).

However, the loss could increase as Australia prepares for its traditionally worst period for bushfires during the dry, hot summer weather.

The fires, whose cause has not been determined, started Nov. 26 and have hit northern New South Wales and areas south and southwest of Sydney, burning mainly isolated and sparsely populated bushland and rural areas.

There are no known commercial losses; some farmers suffered livestock losses and fence and property damage and are likely to have coverage under agricultural or crop insurance policies, said a spokesman for the Melbourne-based Insurance Council of Australia, which represents most of the nation's non-life insurers.

Eleven homes have been destroyed, 20 have been severely damaged and 200 have suffered minor damage, the spokesman said.

Early estimates put insured property and home contents damage claims at $5 million to $10 million Australian ($3.4 million to $6.7 million), but he said the figure could increase because the bushfire season has just started, and January traditionally is the worst month for fires.

The Australian Nuclear Science and Technology Organisation, a federal statutory authority that operates a nuclear reactor at Lucas Heights, 19 miles southwest of Sydney, shut down the reactor Dec. 2 for 24 hours as a precaution because fires were burning near the facility's perimeter, about 700 feet from the buildings, a spokesman for the organization said.

The ANSTO spokesman said the fire risk was low because the surrounding property was "backburned" to remove nearby flam-mable undergrowth.

ANSTO owns the reactor and surrounding research facilities that manufacture radio isotopes and other products for the medical and electronics industries.

ANSTO has property coverage but does not buy business interruption coverage, the spokesman said, because the reactor is only part of the organization's operations. Staff were transferred to other projects while the reactor was shut down.

The Insurance Council spokes-man said despite the publicity on the lack of insurance after the 1994 bushfires in outlying Sydney suburbs (BI, Jan. 17, 1994), some homes destroyed at Menai, a suburb 19 miles south of Sydney that borders bushland, were uninsured.

Losses have not reached the same level as in the 1994 fires, when insurers paid out $56 million Australian in claims, he said. The actual insured losses in 1994 were well below initial estimates.

"If this year is anything like the fires in 1994, 22% of homes were uninsured and 50% had no contents insurance," the Council spokesman said. While commercial losses were low in 1994, most of them were insured.