Insurers believe community concerns about raising the height of the Warragamba Dam wall must be balanced against the “paramount importance” of reducing the risk of flood and saving lives and property in Western Sydney.

The proposed mitigation plan, which potentially involves raising the dam wall by 14 metres, has sparked environmental concerns over the upstream effects from inundations.

But the Insurance Council of Australia (ICA) says the extra capacity would not be used for water storage and the upstream area would only by fully inundated on rare occasions – equating to a probability of about 0.2% in any given year.

“This low probability contrasts sharply with the probability of flood for many residents of the valley where the risk is 25 times more likely to occur, a fact signalled through higher flood premiums,” ICA says in a submission to a NSW parliamentary committee examining the proposal.

ICA says it supports consideration of the environmental impacts of raising of the wall, but it’s concerned that there may be “significant misunderstanding or overestimation” in the community over how the mitigation project may impact the surrounding landscape.

Appropriately drafted legislation should ensure that the proposed flood mitigation zone is not used for water storage, it says.

The council has also highlighted that other mitigation proposals would be less effective in addressing the risks.

“Decisions that could lead to rare flooding of environmental resources are fundamentally regrettable to all, but must be balanced against the greater community need.

“Where sound analysis shows that there are no reasonable alternatives, those difficult decisions must be made in a timely fashion in order for work to commence in time for lives to be saved and property protected before the next serious flood event.”

The Legislative Council Select Committee on the Proposal to Raise the Warragamba Dam Wall was established in June and is Chaired by Independent Member Justin Field.

Hearings are scheduled for November 22 and 25.