Insurance losses from the flooding catastrophe could surge past $1 billion based on comparisons with past eastern states weather disasters that have caused rivers to burst their banks and inundate properties.

Insurance Council of Australia (ICA) CEO Andrew Hall says the current flooding is more severe than an event that hit NSW last year as the drought broke.

“Those floods cost nearly $1 billion in claims, so we expect that there will be a fairly hefty bill from this event,” he said on ABC Radio this morning when asked if losses could reach the $2 billion level seen after the Black Summer bushfires.

ICA says 11,700 claims had been lodged as of 9.30am and the figure will continue to climb in coming days as people return to their homes and businesses and assess damage.

Areas with the most claims are the Mid North Coast towns of Port Macquarie, Kempsey, Laurieton and Taree and west of Sydney around Penrith and the Hawkesbury-Nepean Valley.

“Insurers are already contacting policyholders in impacted areas to help with the claims process and providing temporary accommodation to residents who have been displaced,” Mr Hall said in an update this afternoon.

ICA, which yesterday declared a catastrophe for large parts of NSW, continues to work closely with members in South East Queensland to determine if a declaration for that area is required.

NSW Premier Gladys Berejiklian says the Hawkesbury-Nepean Valley flooding is a 1-in-50-year event, while the Mid North Coast, where locations have received more than 1 metre of rain, is experiencing a 1-in-100-year event.

The east coast low which hit NSW and Queensland in February last year caused losses of $989 million, Swiss catastrophe data company Perils said in a final estimate released last month.

Another east coast low in June 2007 caused insured losses of $2.4 billion, using adjusted figures, while a similar event in April 2015 cost insurers an estimated $1.2 billion.

More than 30,000 claims were lodged in 2019 after a storm system bringing torrential rain stalled over Townsville, with losses topping $1.2 billion.

Mr Hall says the latest catastrophe shows the need for mitigation investment and improved land-use planning.

“We have to have a national conversation around where development is permitted, and the fact that a lot of developments have occurred in areas that face 1-in-50-year floods,” he told ABC Radio.

“Questions need to be raised around what is government doing to be able to prevent or mitigate those types of risks to peoples’ homes.”

The Bureau of Meteorology forecasts sunny weather will return to the Sydney region from this afternoon but water levels will remain high over the next couple of days in the Hawkesbury-Nepean.

“We are not out of the woods yet,” Senior Meteorologist Agata Imielska said. “Even though we will have that blue sky and sunshine returning, flooding will be continuing.”

The bureau has also released warnings for damaging winds, abnormally high tides and damaging surf along the NSW coastline, while a developing flood situation is affecting inland regions.

The catastrophe has reignited discussion over the flood cover standard definition introduced for home building and contents policies following the 2011 Brisbane floods.

ICA says most residential policyholders who have opted out of flood cover will still be covered for storm-related damage, and should contact their insurer to obtain an assessment of their particular circumstances.