Nearly $6 million has been clawed back from insurance companies after policyholders affected by the Victorian and NSW flood disasters complained about their treatment.
Data from the Australian Financial Complaints Authority (AFCA) showed there were 1,064 flood-related complaints recorded in Victoria and New South Wales as of December 31.
The most common were about home building insurance (74 per cent), home contents insurance (9 per cent), landlords' insurance (6 per cent), comprehensive motor vehicle insurance (5 per cent), and personal transaction accounts (2 per cent).
Overall, successful complaints resulted in compensation and refunds of $5.9 million to policyholders.
AFCA lead ombudsman for insurance, Emma Curtis, said flooding had caused a significant and ongoing effect across Australia.
"We acknowledge that the scale of natural disasters around Australia combined with shortages of labour and materials have meant delays in insurers assessing claims and in repair work being completed," Ms Curtis said.
"AFCA remains concerned about the number of disputes being escalated to us."
An AFCA spokesperson said insurers should be able to at least explain the basis for their increased premiums.
Ms Curtis said the authority expected insurers to do all they could to assess claims promptly, inform customers about expected time frames, and clearly communicate about claims options.
"To help us manage the high numbers of complaints we are receiving, here at AFCA we have increased the size of our team and we are regularly updating people on the progress of their complaint," she said.
"If your complaint is urgent, it is important for you to let us know to help us prioritise these cases."
Healthy competition vital
Victorian Nationals leader Peter Walsh said there had been a substantial cost increase to the insurance policy premiums renewed in flood-threatened postcodes since the 2022-23 Victorian and New South Wales flood crisis.
Mr Walsh said some insurance companies were looking at cutting coverage to particular parts of Australia.
"We had this debate with the insurance industry post the 2011 floods and they saw reason and stayed in those areas offering insurance," he said.
"We'll be having that argument again to make sure that there is competition to keep the prices reasonable in those areas that have had floods."
Mr Walsh said competition helped to keep "all the insurance companies honest".
"We need many insurance companies and underwriting businesses in those areas to keep the prices affordable," he said.
In a statement to the ABC, a Victorian government spokesperson said the government was concerned about reports of Victorians who could not access affordable insurance.
"We're working with the Commonwealth government and the Insurance Council of Australia to explore ways to make insurance more affordable and available to Victorians," it said.
