Consumer groups will drive home their concerns over insurers’ handling of flood claims at the opening hearing of a parliamentary inquiry tomorrow morning.

The House of Representatives Standing Committee on Economics will hold public hearings across four weeks regarding the devastating 2022 floods, with the Financial Rights Legal Centre, Choice and the Consumer Action Law Centre first to appear.

The committee says it has received submissions from consumer advocacy groups that worked closely with policyholders and insurers following the floods, and from regulators, local councils and other organisations.

“Many of the submissions articulate the struggles that residents faced, including long delays in damage assessments and repairs, claims being denied because of ‘wear and tear’ exclusions, inadequate cash settlements and poor communication, which all compounded people’s frustrations,” committee chair Daniel Mulino said. “The committee is looking forward to hearing all the evidence.”

The Insurance Council of Australia (ICA) and the eight largest insurers have lodged submissions highlighting the challenges of handling a record number of claims during the 2022 flooding disaster, and measures taken to improve preparedness.

The inquiry’s terms of reference say it will consider findings from reports such as the ICA-commissioned Deloitte external review of insurers’ responses and an Australian Securities and Investments Commission (ASIC) claims handling review.

“When you have the largest flood event in history, combined with post-covid supply chain problems, you are going to have issues,” an insurer source said today.

The industry is looking to improve weaknesses, has made changes to processes and will “do better” if such events happen again, he says.

“Would there still be issues and delays? Of course there would. You can’t be set up as business as usual to absorb an event like that.”

Insurance CEOs, who are scheduled to appear next Monday and on February 9, are preparing for a potentially hostile reception from the committee, which has been expanded for the inquiry.

“The regular members of the committee are pretty sensible, but four MPs from flood-affected constituencies have been co-opted onto it, including Andrew Gee, who is on the warpath,” the source said. 

ASIC and the Australian Prudential Regulation Authority will appear before the committee on Friday, the Australian Financial Complaints Authority is scheduled for February 21 and the General Insurance Code Governance Committee and reinsurers will appear on February 23.

The inquiry has gathered feedback on policyholder experiences through an online survey. So far, 391 people have completed the survey, which will remain open for the duration of the inquiry. Submissions can also be made here.

Thousands of people were affected by the 2022 floods from south-east Queensland through to Tasmania. Some affected towns were flooded again over the recent Christmas and New Year period.