Homebuyers need to research the potential climate change risks of homes before they buy or risk skyrocketing insurance premiums or plunging property values.
The Climate Institute, in partnership with consumer group CHOICE, on Thursday released a report on home insurance, extreme weather and climate change.
The report says governments and the marketplace often fail to inform homebuyers of the extreme weather and climate change risks of property.
In some high-risk areas, home insurance policies are already costly and some insurers will not offer policies at all due to threats such as bushfire and rising sea levels.
The Climate Institute chief executive John Connor said homebuyers needed to do to their own research because the information was not readily available.
He said the first step was to do an online check of insurance premiums.
"If some are not offering online quotes in that area or there is a wide divergence in premiums, then there may be a problem," he said.
Even if a homebuyer is able to get one of the lower-priced premiums, the insurer might dramatically increase it in the future once it becomes aware of the risks.
Homeowners who have unwittingly bought in an at-risk area also need to check if they are insured for enough money to rebuild their home, because changing weather patterns might have altered the building codes.
The report calls on governments to provide more information to potential homebuyers about the risks in the area.
Mr Connor said the requirements for local governments to provide homebuyers with information on climate change risk had been cut.
He recommended homebuyers ask their council for information on climate change risks, such as flood plain maps.
"If they don't give you much information, then it's a cause for concern," he said.
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