Excessive premiums have left many Lismore residents uninsured for flood damage caused by Cyclone Debbie, Mayor Isaac Smith says.

People in some parts of the northern NSW city faced premiums of $10,000-$20,000 if they included flood cover, forcing them to exclude it from home and contents policies, he says.

“The ones I have spoken to said they didn’t take it up because the cost was prohibitive,” he told insuranceNEWS.com.au.

“We need an insurance industry that works and functions well, because the Government can’t do everything, but there is a gap there.”

But the Insurance Council of Australia (ICA) says it is governments’ responsibility to protect communities from known and predicted risks.

Spokesman Campbell Fuller says the council continues to call for increased funding for mitigation and resilience measures.

Mr Smith says extreme weather is likely to become more common, and actions to address the risk need to involve government representatives, insurers and the community.

“A lot needs to happen from here to ensure people are protected in future,” he said.

Lismore has been partly protected by a levee since 2005, but it was not built to withstand the sort of extreme event that hit at the end of last month. Raising the bank or extending its length would have implications for other areas, including towns downstream.

“There has got to be a discussion about the levee system and how we manage it, and what we can do to improve it, but there is no simple, easy solution,” Mr Smith said.

“People who have moved to Lismore in the past 10 years have never experienced a flood, so they may have thought they were safer than they really were.”

Many businesses have also skipped flood cover due to the cost, he says.

Mr Fuller says premiums reflect the risks to each property based on the latest available government data and each insurer’s underwriting criteria.

“Every policy is different and insurers assess every claim on its merits, often with the help of specialist hydrologists,” he said.

“Policyholders who have suffered a financial loss as a result of Cyclone Debbie and the subsequent storms and floods should lodge a claim, and the insurer will see what assistance can be provided under the policy.”