The Insurance Council of Australia (ICA) has declared a significant event for regions of NSW impacted by severe storm and flooding in recent days, and says it may escalate its declaration to an insurance catastrophe.

All regions impacted by flood in NSW since Friday fall under the significant event declaration, which was also used for Victoria’s Mansfield earthquake event.

ICA says catastrophe status may still be assigned if there is a significant increase in the number or complexity of claims, or if the geographical spread is extended. For now, preliminary catastrophe processes have been activated to help assess the insurance impact of the current floods.

“This remains an unfolding weather event,” ICA said. “Insurers understand this is a distressing time for policyholders already impacted by floods this year and will be placing a high priority on those with ongoing claims.”

Under a significant event declaration, ICA commences its claims data collection, analysis, and reporting processes in consultation with members, and works with government and agencies. It has also activated a disaster hotline on 1800 734 621 for insurance-related enquiries.

Parts of southern Sydney were struck by 200mm of rain in 24 hours, almost a fifth of the city’s annual average, and rainfall overnight saw some rivers peak for a second time. The Bureau of Meteorology (BOM) says it may take up to a week to start to see floodwaters recede.

Prime Minister Anthony Albanese will visit flood-affected areas tomorrow morning.

A severe weather warning is active for parts of the Hunter Valley and Mid North Coast, and NSW Premier Dominic Perrottet has warned the event is “far from over” as 55,000 people came under evacuation orders and 22 flood rescues were performed overnight.

The SES says rising floodwaters may inundate homes in 19 suburbs around The Entrance, Long Jetty, Chittaway and further north when the lake level reaches around 1.6 metres, which is expected this evening.

“There are still substantial risks for flash flooding across our state,” the Premier said. Disaster assistance has been made available in 23 local government areas, including Northern Beaches, Hornsby, Sutherland and Blue Mountains.

Insurers have already been battling close to 225,000 flood-related claims with insured losses estimated at $4.8 billion from floods that struck NSW and Queensland in February/March. That is Australia’s costliest weather event in two decades and the third costliest ever.

IAG said today it had received 1233 claims across its brands so far, the majority with NRMA Insurance for storm damage such as water entering through roofs, wind damage and fallen trees. That number was likely to rise over coming days as people return to their properties.

“This is an incredibly difficult and stressful time particularly for people who have suffered multiple storms and floods in just the past few months and our teams are standing by to provide immediate help,” IAG MD and CEO Nick Hawkins said.

“We’re urging customers to lodge their claims as soon as possible so we can ensure they’re safe by providing temporary accommodation if required and emergency financial assistance."

Suncorp CEO Steve Johnston says current claims volumes are low but are expected to increase over coming days.

“Our teams are in place to receive claims and will move into affected areas when the weather event concludes,” he said.

BOM says major flood warnings will persist for some days, with Meteorologist Jane Golding saying it will “take a bit of time for the water to make its way out to sea so major flood warnings are likely to continue for the next couple of days.”

A trough over the Hunter district was forecast to move slowly northward for the remainder of today, and a coastal trough was also forecast to develop across the northeast later this evening, and then deepen on Wednesday. Isolated six-hourly rainfall totals of up to 80mm were possible, and of up to 125mm over coastal areas of the mid-north coast.

“Rainfall will further contribute to flooding already being experienced and maintains the potential for landslides,” BOM said, adding that gusty winds may see trees toppling in the softer and very saturated soils. Port Macquarie, Taree, Cessnock, Maitland, Dungog and Kulnura among areas likely to be affected.

ICA CEO Andrew Hall says the latest rain marks the fourth recent flood event for some NSW communities and it is clear better protection is needed from worsening extreme weather - requiring greater investment in mitigation and resilience.

“We understand this is going to be an incredibly difficult time for many,” Mr Hall said. “Insurers understand the emotional impact of these extreme weather events which are becoming more frequent and severe and will be taking swift action to ensure communities receive the assistance they need as quickly as possible.”

Claims experts were assisting customers with their claims to help alleviate the stress and uncertainty associated with the unfolding weather event, he said.

“Insurers … are working with customers to understand if their property is being repaired from previous extreme weather events and has been impacted again.”

As at the start of June, insurers in Australia had faced half a million natural hazard claims from a string of seven declared catastrophes since October 2020, and the Victorian earthquake.