Flood-hit Lismore residents today shared stories of difficulty with insurance claims as the federal inquiry into insurers’ handling of the 2022 catastrophes visited the NSW town.

The meeting was the third this week held by the House of Representatives Standing Committee on Economics, which was in Queensland’s Logan on Wednesday and Caboolture on Tuesday. 

Northern NSW resident Henry Long addressed the committee, saying he had paid for flood insurance for seven years on the advice of his mortgage lender.

"When the flood happened, I thought, wow, that's a relief, but I was wrong. It really put a lot of mental toll on me," he said. "Every time you ring [the insurer] up you wait for half an hour or even one hour before someone even picks up ... You're sick of hearing that ringtone, sick to your stomach." 

Mr Long says it now costs $12,000 a year to insure his home and he is worried it will jump to $20,000 in future.  

"So we’re stuck. We’re asking to have a better insurance framework or scheme, particularly for a flood-prone area like Lismore. There's a lack of humanity and connection and the mental health issue is never addressed. They talk about money, figures, but the biggest impact is our mental stability." 

Another resident said restumping of her house was delayed so long by a protracted claims process that the cost jumped from the original $40,000 quote to $100,000.

At The Living School, Principal John Stewart says his building insurance jumped 236% in three years to $74,355, and it no longer covers flood.

Another resident told the committee she called police over the practices of builders on her flooded property and she now feels "insurance in its present state is a scam and my husband and I were scammed.

"The way that insurance and builders work with post-disaster communities to rebuild has to change and be accountable instead of destroying vulnerable people and the properties that insurers are paid to fix. I would advise people to save their money."

MP for Page Kevin Hogan said relocation efforts are "failing and will not remove people from the floodplain as was intended to do". 

"We are not talking enough about mitigation, which is the only game in town that will help us. The whole experience has been a complete dog's breakfast, the insurance industry has said and acknowledged that," Mr Hogan said. 

"We will be expecting some improvements from them even if they're not forthcoming yet, and I hope we'll be asking for public information from them about how long it takes to settle a claim, resolve a dispute. We don't get that publicly, comparisons between insurance companies, and I hope this committee will be calling for that type of information."

Southern Cross University Senior Lecturer Hanabeth Luke recommended insurers introduce personal caseworkers, "simple and functional" forms, and clear communication about timelines, possible outcomes and interim support payments. Improved collaboration between agencies would also help "avoid continued major inequity in assessment outcomes neighbour to neighbour".

Committee Chairman Daniel Mulino said hydrology reports have been raised frequently in the inquiry. "They're commissioned by the insurer and so if there's a dispute, it creates a difficulty in that the expert report that's being relied on has been commissioned by one side of the dispute ... it creates at least a perception that's problematic.  

"One possible solution that has been put to us is to create panels which can be drawn upon by parties ... And that might be a panel that can be drawn on for more than one household potentially ... perhaps where there's a street, you might try and get that dealt with through a single perhaps multi-analysis report."

Byron Bay Chamber of Commerce President Matt Williamson said insurers “need to rethink and redo the product that they've got so that it's actually purposeful for people. What most businesses ... actually needed was money in the first instance to get back trading."

Business NSW Northern Rivers Regional Director Jane Laverty said “empathy was very lacking” in insurance customer service. 

"We're talking about small businesses here, mum and dad businesses that are in a regional community, not multinationals. This was that last piece that was meant to be there to support them and protect them not delivering," she said. 

"I'm very concerned for Lismore. When businesses are looking now to reinsure, the moment they say they have a 2480 postcode, they are literally being wiped out of being offered insurance."