The parliamentary floods inquiry has made 86 recommendations in a final report released today, including strengthening regulation and the industry code of practice, and considering a “government-supported reinsurance arrangement” for high-risk properties.

Inquiry chairman Daniel Mulino says the recommendations are supported by all committee members and will lead to better claims management, more transparent reporting of insurer performance, lower premiums for households exposed to a high risk of flooding and improved long-term strategies for preparation and resilience.

Too many cases were mishandled after the 2022 floods examined by the federal inquiry, and inconsistent decision-making meant neighbours received different outcomes after the same event, he says.

“Long delays caused emotional, mental health and financial strain. More than two years on, many people still can’t go home. Initial offers were often too low, which was especially problematic for cash settlements.”

The committee recommends that legislation standardise key terms across all insurance contracts, including all major forms of water damage, “wear and tear” and “lack of maintenance”.

It proposes government involvement in creating and funding an independent expert panel of hydrologists to provide second opinions for policyholders, and says the government should “investigate mechanisms to require insurers to more clearly communicate the basis for the price of premiums”.

It recommends insurers amend their policies to provide fully paid temporary accommodation until a claim is closed, unless the policyholder has unreasonably caused a delay.

The proposal for the government to consider measures to improve the affordability of flood insurance for policyholders with high-risk properties, including the “appropriateness of government-supported reinsurance arrangements”, is tied to mitigation.

“Any scheme involving public funding being devoted to a reinsurance pool or subsidies should be phased out over time in line with ongoing investment in community and household mitigation to reduce the underlying risk,” the report says.

The committee also says the government should continue to commit at least $200 million a year for community-level mitigation, and calls for states and territories to remove insurance taxes.

insuranceNEWS.com.au will publish further updates and reaction later today and on Monday.

The report is available here.