Narromine resident Lyn Jablonski says her home insurance premiums have gone up five-fold in just 12 months despite the town not having flooded for 68 years.
The Narromine Shire councillor said the last major flood in the levee-protected town was in 1955, when sporting fields were inundated.
"Most of the insurance companies will not allow you the option to exclude flood insurance, and I'm pretty damn sure we won't get one again," Cr Jablonski said.
She said her home was 1.5 kilometres south of the Macquarie River.
"When everyone else is making increases according to CPI, this is nothing short of price gouging by insurance companies," she said.
"It's wrong."
She said Narromine's levee bank held strong even during storms which caused severe flooding for other towns along the Macquarie River last year.
She said her premium for the 2022-23 financial year was $2,753 before jumping to $14,660 for 2023-24 — an increase of 432 per cent.
Retired mechanic Fred Klintworth said he was forced to cancel his flood insurance when it more than doubled to $200 per month in one year.
He said it was no longer affordable on his pension, which was only $310 per fortnight.
"I think it's a bit unfair, some of the premiums," Mr Klintworth said.
"With house insurance, rates, the power bill, that's $300 per fortnight gone."
The shire council has written to the Insurance Council of Australia asking for an explanation as to why Narromine's premiums have increased so much despite its low flood risk.
An insurance council spokesperson said premium calculations were based on a wide range of factors.
"Each insurer has their own underwriting [insuring] criteria and will use these criteria to determine the risk of individual policies and policy categories for their business," they said in a statement.
The spokesperson said insurance could become increasingly costly, particularly for those in natural disaster risk areas as the risk of extreme weather worsened.
Cr Jablonski said she was insured under Westpac General Insurance, which had its pricing calculated by Allianz.
In a statement, a Westpac spokesperson did not specifically address premiums in Narromine but said pricing generally had been impacted by extreme weather events, updated flood risk modelling, and increased building costs.
"We understand customers are concerned about the increase in their insurance premiums," the spokesperson said.
"Flood cover is a standard inclusion within these policies to ensure customers have adequate protection for flood damage, in addition to storm and rainwater cover."
Cost of climate change
University of NSW insurance expert Michael Sherris said insurance premiums were increasing across the world due to an increase in natural disasters.
Professor Sherris said "huge losses" at a global, national, and state level trickled down to local consumers from international reinsurance companies — even if they were not directly impacted.
"Climate change has been on the insurers' radar for a long time, and it's becoming more prevalent," he said.
"The impacts from climate change are already being factored in by insurers and they've already looked out into the future to see what these trends are likely to do in terms of insurance losses."
He said some insurers were more detailed in their modelling, while others spread their risk more generally.
