A growing number of Victorians are finding it more difficult to insure their homes after widespread flooding in the state, despite not living in at-risk areas.
Wodonga resident Lynley Kennedy said there was flooding along parts of the Murray River, but her home was far from being under threat.
But she was knocked back by several insurers when she tried to change her contents policy within the same postcode.
"I rang them to change the address and they said 'unfortunately, due to our underwriting guidelines, we are unable to provide you cover at this address'," Ms Kennedy said.
"I've gone online to do quotes and the minute I put my postcode in it says, 'sorry, we will not insure you'."
She was told by an operator over the phone that it was because she was in a flooded area.
"We're moving 1.3 kilometres and we haven't seen any water near us," Ms Kennedy said.
Curious to see if other houses were impacted, she tried to generate quotes using other addresses with the same postcode but from the highest point in town and found they too were blocked.
Widespread issue
Financial Rights Legal Centre senior policy officer Julia Davis said the problem was not limited to "just one postcode".
"It's a problem we're seeing in communities across the country," she said.
"The way insurance works in Australia right now is that it is a purely commercial, free-market decision by an insurer whether to have business in one area or not."
Insurers often make decisions about whether or not to insure certain properties or even whole postcodes based on how much risk they carry overall, or how many claims they have paid in the past year.
"It's also based on what global reinsurers are telling [insurance companies] to do," Ms Davis said.
No coverage
The practice of an insurance company pulling out of a whole postcode and not offering cover at all is referred to as "red lining".
"Sometimes they do it to try and force the government's hand to come in and do something big, like build a levee or some other kind of mitigation work," Ms Davis said.
"But sometimes they're just doing it because it's not profitable in that area."
The Financial Rights Legal Centre has been lobbying for the government to start thinking of insurance as an essential service.
"Once you start thinking about something like an essential service then the government can step in to ensure the price, the quality, the reliability of that service is in place for everyone," Ms Davis said.
"It also means we could provide concessions for people on really low incomes or on a disability pension, people in society who wouldn't otherwise have access to that product."
Issue to get worse
A report by the Climate Council earlier this year found 1 in 25 homes was at risk of becoming uninsurable by 2030.
Independent economist and Climate Council councillor Nicki Hutley said the prediction could even become reality before then.
"We know that this year has been the most costly for insurance," she said.
"It's the worst disaster we've had."
She said there was no simple solution to making insurance affordable in an age where climate change was increasing irrespective of what happened.
"Climate change makes insurance a very difficult industry to be in," she said.
"There are going to be areas that are constantly affected which puts insurance at an unviable rate.
"If insurance premiums on offer are beyond the affordability of the average household then it may as well not offer a product because it's out of reach."
She said the issue would worsen, especially for low-income households.
A spokesperson for the Insurance Council of Australia said: "As the risk of extreme weather worsens, insurance can become increasingly costly for those in flood-prone areas."
The spokesperson said that before offering a policy, insurers considered factors such as their appetite for risk in the area and the natural disaster risks specific to the property.
"Insurance is not one-size-fits-all," the spokesperson said, and "consumers looking for new insurance or renewing a current policy should always shop around".
