A NSW council executive has told the Royal Commission into National Natural Disaster Arrangements that residents of her bushfire-ravaged region cannot afford to insure their properties.

The hearings, which are currently focused on local government responsibilities, have not spent significant time on insurance issues so far.

But this week Director Infrastructure and Environment at Richmond Valley Council, Angela Jones, raised concerns about the availability and affordability of insurance.

Ms Jones says more than 50% of Richmond Valley was affected by last season’s bushfires.

“We found where people had lost their homes … a lot of them weren't insured adequately,” she said.

“We have a very low socio-economic demographic in the Richmond Valley area.

“So generally, if somebody tries to get insurance on a property that may be flood impacted or be in another risk category such as bushfire, my understanding is it is very difficult to get insurance coverage and, if you could, it would be very, very expensive.

“And, in my opinion, a lot of our community that live in these more rural and remote bushland areas would not have the capacity to obtain adequate insurance from a cost perspective.”

Ms Jones was asked whether the council does anything to encourage take-up of insurance, or collects data on underinsurance.

“Council does not have any role with regards to educating the community with regards to insurance,” she said.

“Certainly it's not a local government’s function to inform the community with regards to their needs or requirements should they wish to have insurance. It’s not a compulsory component of life, really.”

The Insurance Council of Australia (ICA) has previously estimated that up to 80% of bushfire-affected property owners could be underinsured.

ICA has campaigned for reform on insurance taxes in NSW, which make up more than 50% of household premiums and 70% of small business premiums.