Policyholders have expressed their frustration with insurer conduct at the first of three community hearings under the federal inquiry into responses to the record-breaking floods of 2022. 

Today’s hearing, in the southeast Queensland town of Caboolture, allowed flood victims to speak to parliamentary committee members after initial sessions in Canberra heard from insurers, regulators, consumer advocates and other stakeholders.

Angry residents raised issues with insurance claims, some of which remain unresolved more than two years after the February 2022 catastrophe.  

Karl McKeever criticised his insurer Hollard over claims handling after his Mount Glorious home was inundated. 

He said 1642mm of rain – a year’s worth – fell across four days, but he struggled to have his claim accepted. He said the home was unliveable after the insurer’s make-safe repairs failed to protect it from further wet weather, and his case reflects a “systemic issue of the insurer and their supplier ignoring the insured”.  

“Anything to be done to make things more difficult has been done,” Mr McKeever said. “You would never expect to hand your property [over for] repair, and see your insurer and builder destroy it in front of your eyes and declare it a total loss, and then ask the owner to pay for it.”  

Another resident said he was “completely lost” after an insurer stripped his home before his claim was significantly delayed. The man said the insurer offered to cash settle the claim for $119,000, but he declined after receiving quotes of more than $560,000 for repairs.   

Caxton Legal Centre Financial Rights and Housing Security Senior Lawyer Jacqui Cavanagh told the committee case management is “a big problem”, saying frustration at delays led to a “breakdown of trust” between many customers and insurers.  

“Some clients have problems with understanding where things are at and need constant reminders of getting information regularly,” she said. “Other clients know their claims inside out, upside down, and are very frustrated that the person on the other side of the call can’t follow them on that journey, which is taking months and years.”  

She said insurers need to focus on providing customers with consistent service. 

The committee also heard from local council representatives, who called for a change in the national approach to flood risk management.  

“A consistent national approach should provide much more certainty on flood risk in our communities and the potential impacts if flooding occurs, including an understanding beyond the ‘one-in-100-year’ analysis,” City of Moreton Bay CEO Scott Waters said.   

“Through this approach, councils should engage with insurers and reinsurers with consistent information to outline cost of insurance for communities, with consideration ... if mitigation measures can be placed to reduce potential costs.”

City of Moreton Bay Emergency Management and Public Safety Manager Christopher Barnes said inconsistent messaging has been a leading reason for poor preparation for flood events, and communities need more uniform guidelines.   

“Unfortunately, it’s quite dispersed between providers, and the Insurance Council of Australia as an overarching body can still continue to invest and do better in providing a single message in preparing for events,” he said.

“Having an established standard for the industry would be really helpful because, at the moment, there is confusion in the community as to what they can and can’t do. It’s not the local government’s role always to [explain] that; it’s on the industry to own that part.”

Hearings will continue tomorrow in Logan, Queensland, before heading to Lismore, NSW, on Thursday.