When Joanne Heaver began looking for a place to settle down in 2019, she didn't picture ending up in a relatively new, high-end retirement village along the banks of the Maribyrnong River.
But the more she considered the Rivervue village in Avondale Heights, the more she believed it would meet the needs of her 36-year-old daughter, who lives with her because of a psychological disorder.
"I thought 'great' and had a few chats to her medical providers, mainly her psychiatrist," the 67-year-old said.
"He said he thought that was an excellent plan.
"So we moved here. I set about selling my other home and invested almost $600,000 into the villa here."
Three years later, the retired public servant became one of about 70 residents displaced from their homes when sudden river flooding damaged 45 villas beyond inhabitation and impaired another two.
It wasn't until after the disaster last October that residents learned details of the village's building insurance.
Policy documents seen by the ABC show Rivervue had a flood insurance limit of $5 million — an amount Ms Heaver and others say is inadequate given the documents suggest there are $86 million in assets.
Rivervue, which is owned by property company Tigcorp, has itself said the $5 million won't fund all of the "extensive reinstatement works" required in the village, but has agreed to cover the shortfall.
Residents paying own accommodation costs
Under Rivervue's arrangements, residents who bought into the village did so by taking out 99-year leases over villas, leaving the company responsible for building insurance and the residents to cover their contents.
In the years leading up to the flood, some residents asked about the building insurance policy, according to notes from residents committee minutes seen by the ABC.
"We wanted to know what we would've potentially had to cover if there wasn't enough," Ms Heaver, the committee's former treasurer, said.
But they say they were not provided with that information.
Instead, Ms Heaver said a certificate of currency, confirming the $5 million limit, was circulated after the October 14 disaster — a discovery she described as "devastating" for displaced residents.
That's because after the flood, Rivervue initially covered the displaced residents' temporary accommodation.
But on October 18, it wrote to them saying it was unclear if insurance would continue to cover those costs.
"Therefore, from 2 November onwards, residents should take responsibility for securing their own accommodation as you may be responsible for costs," the email from Rivervue said.
Another resident, Stan Korkliniewski, said some of his peers had to draw from their super or their savings to cover months of unexpected rental fees. In his case, he is renting a property more than an hour's drive from his home, for $495 per week.
"We were on our own. We had to find our accommodation at our own cost," he said.
When Mr Korkliniewski later requested further policy details from Rivervue, he was told disclosure of those documents was not required under relevant legislation, the Retirement Villages Act.
In a statement, Rivervue said it was not contractually obliged to cover the initial temporary accommodation costs but did so as part of a suite of support measures it chose to offer to residents.
"We did this to support residents at a time of great uncertainty and to ensure their safety from potential exposure to contaminated water," its statement said.
'We built on a swamp'
Other details emerging in the aftermath of the disaster have raised questions about why the village only secured $5 million in flood insurance.
Karl Mellon, whose firm Climate Valuation uses detailed climate risk data to help homebuyers guide investment decisions, said it was "odd" to see a flood cover that didn't match the cost of repairs.
"Flood causes an awful lot of damage," he said.
"The damage can be, in principle, equivalent to the total cost of the property, and therefore it is normal to have flood coverage to cover the full reinstatement cost."
However, documents that emerged in the course of an inquiry into the flood disaster have revealed some villas were built on land that was designated a one-in-100 year flood risk area up until a zoning change in 2016.
Rivervue, in its submission to the inquiry, said the change followed earthworks carried out at the site with approval from Melbourne Water, which were intended to push the flood risk boundary away from where the dwellings would later be built.
However, Mr Mellon said his initial analysis of the Avondale Heights village, using maps accessed by the insurance industry, still identified it as a flood zone.
"We would certainly expect that any insurers would be looking at this location, identifying it's in a flood zone, and either limiting their exposure to flood damage or requiring very substantial premiums in order to cover potential losses," he said.
Rivervue's statement said the village was developed according to approved permits and planning controls issued by Moonee Valley City Council and reviewed by Melbourne Water.
It added that $5 million was the highest coverage Rivervue could find.
Some residents question if this zoning history was the reason why.
"Basically, we built on a swamp," Mr Korkliniewski said.
Had he known some of this information, he said would not have moved into the property.
Call for transparency measures
The insurance industry says repeat extreme weather events have put the sector under pressure, in turn elevating the importance of risk-reduction measures like better land use planning and resilient building.
"We are now looking at a situation where reinsurance costs globally have gone up and the risk profile is changing for many areas," the Insurance Council of Australia's Andrew Hall said.
"So that does have a knock-on effect to premiums, and it means we need to think more about how we can reduce the risk moving forward."
In its inquiry submission, Rivervue acknowledged the flood event may affect its future ability to get insurance.
Its residents are now pushing for the state government to consider mandating the disclosure of insurance information as part of a current review of the Retirement Villages Act.
Earlier this year, the Productivity Commission separately recommended state and territory governments mandate the pre-sale disclosure of projected climate risks for commercial and residential properties.
Ms Heaver said she was concerned the events would hurt the value of the retirement property she invested in, as well as its chances of being reinsured when the current policy expires.
"This has been a diminishment or a destruction of our wealth, which at the end of the day is the destruction of my children's wealth, and the destruction of my grandchildren's wealth as well," she said.
Rivervue said it expected all residents to have returned to their homes by the end of next month.
