The Insurance Council of Australia (ICA) has declared a significant event for parts of central-west NSW impacted by severe flooding since Saturday.

The declaration may be escalated to an insurance catastrophe if there is a significant increase in claim numbers or complexity, the geographical spread extends, or in consultation with insurers.

“This remains an unfolding weather event,” ICA said.

The most significant flooding is in Forbes, Cowra, Condobolin, Molong and Eugowra, where a woman’s body was found in floodwater today and an 85-year old man was missing. Homes were swept off their foundations in what locals described as a “wall of water” and “inland tsunami” that struck around 270kms west of Sydney.

"Houses that were number 14 are now at number 28," Cabonne Council mayor Kevin Beatty told local media. “The only thing that's stopped it is they've come to rest against a power pole or a tree.”

Fourteen people had to be rescued from a pub roof in Forbes as the town braces for its highest flood level in 70 years, and Mayor Phyllis Miller estimates two-thirds of the town has already been inundated.

“This is still very much an active emergency,” ICA CEO Andrew Hall said, noting Forbes was experiencing its third devastating flood event in four weeks and central west NSW communities were “bearing the brunt” of significant inundation.

"For many this is a recurring event,” he said. "The full extent of damage may not be known by residents until they’re given the all clear to return home following widespread evacuations.”

Under a significant event label, which stops short of a catastrophe declaration, the ICA undertakes claims data collection, analysis and reporting in consultation with members, and ICA representatives will work with government and agencies to see that affected residents receive assistance.

It allows ICA to better monitor and assess the flood so insurers can best respond, said Mr Hall, noting dramatic footage of Wyangala Dam overspilling 230,000 megalitres of water.

“This shows the scale of water and potential damage local communities may face in coming days,” he said.

Local miner Blake Osbourne said there was an inch of mud through his house.

"We're not insured - no-one is insured because we're in a flood area and no one will insure us,” he told ABC News. "A lot of people won't be able to rebuild and they'll just have to leave."

The Bureau of Meteorology has forecast flooding at Forbes to be similar to 1952. Thousands of sandbags have been distributed and more than 1000 properties were covered by an evacuation order for the town.

The SES transferred health workers to the Forbes hospital via boat and emergency authorities have rescued goats and a horse, and a family and two dogs via helicopter. The town of Hay is monitoring its levee after the Murrumbidgee River passed nine metres, its highest since 1974.

ICA says its preliminary catastrophe processes and its 1800 734 621 disaster hotline have been activated.

Meanwhile, a hail storm swept over parts of Sydney today, with the city's inner west hit the hardest, though social media images indicated no large hailstones. "Wet slushy hail, more like snow in the Sydney CBD," said one post.