A federal parliamentary inquiry is being established into the response of insurance companies to Australia’s 2022 flood disasters.
Key points:
- Parliament launches an inquiry into response of insurance companies handling of flood claims
- Residents are battling insurance companies over claims
- The Insurance Council says it welcomes the announcement
Independent MP Andrew Gee pushed for the inquiry because of the experiences of residents in Eugowra and other towns in the state’s Central West and northern NSW.
Many people are still trying to settle claims with their insurance companies for what they say is damage caused by major flooding that hit their communities last year.
“Eight months after the flood event and we’ve got people living in caravans and pods,” Mr Gee said.
“Insurance companies operate with a social licence from the nation and it’s being called into question.
“I hope something good comes from the inquiry and we can get some of these outstanding claims moving.”
On a visit on Eugowra, Assistant Treasurer Stephen Jones said insurance companies needed to be held to account.
“We need to raise the standard to ensure people get what they paid for,” Mr Jones said.
“The inquiry will also look at the underlying risk and ensuring that more houses and communities aren’t put in peril.”
Residents disheartened
Eugowra was hit by devastating floods in November, which caused widespread damage in the town.
Lesley and Brian Smith’s home had a metre of water through the house when a torrent of water burst through.
The property suffered significant damage and the couple have had ongoing issues working through the insurance process.
“The insurance company says it won’t cover damage to the support piers under the house due to the age of the building,” Ms Smith said
“They are refusing to pay out for damage to the roof, when a helicopter hovered above it to rescue us, because they say it’s an old building and it should’ve been maintained.
“We’ve felt very disheartened as I’ve always been the type of person to have everything insured, including for flood and storm damage.”
Ms Smith said the couple had been offered a settlement less than half of what’s in their policy, but they say will not accept and intend to fight it.
“Insurance companies need to be held accountable for what they’re paying people, and not paying people,” she said.
Insurers’ want wider inquiry
As well as looking into the response of insurance companies to the 2022 floods in NSW, the inquiry will also cover issues including ensuring houses are not rebuilt in flood plains
The Insurance Council of Australia (ICA) said it welcomed the inquiry, but has called for it to be broader.
“2022 was a record year for insured losses with flood events in NSW and south-east Queensland so far costing $7.17 billion in insured losses from more than 300,000 claims,” CEO Andrew Hall said.
“The council welcomes the inclusion in the inquiry of the impact of worsening extreme weather events, supply chain issues, and skills and labour shortages.
“We urge the inquiry to examine the impact of state insurance taxes on customers’ capacity to appropriately insure, as well as how the impact of past decisions on land use planning and disaster mitigation impact community risk and insurability.”
In April, the ICA commissioned its own report into how insurers responded to flood damage in northern NSW last year.
Its findings are expected to be released in October.
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