Claims handling issues, internal dispute resolution, cover affordability and land-use planning will be among areas examined by a federal parliamentary inquiry into insurer responses to last year’s flooding, terms of reference released today say.

The Standing Committee on Economics will “take a whole of economy view of the ongoing challenges” from intense and frequent flood events in conducting the consumer-focused inquiry and will deliver a final report during the third quarter of next year.

“We have to do whatever we can to improve the experience for consumers who have been impacted by natural disasters. That starts with listening to them,” Assistant Treasurer Stephen Jones said.

“We’re not looking for short term band-aid solutions here. We want to develop long term mitigation strategies and tackle the underlying issues that make it harder for consumers and drive-up insurance premiums.” 

Mr Jones says tackling the issues can only be done by listening to consumers, experts and the industry, about what does and doesn’t work.

The inquiry will look at responses to events including the southeast Queensland and northern NSW catastrophe in February and March last year, the Hunter and greater Sydney floods in July, the Victorian, NSW and Tasmanian floods of October and the central west NSW floods in November and December.

The committee will hear from local communities, holding public hearings across the country in regions affected by the floods.

The terms of reference say the inquiry will have regard to insurer preparedness for future flood events and will take into consideration findings from other reports. These include the external Deloitte review of flood responses commissioned by the Insurance Council of Australia and the Australian Securities and Investments Commission’s claims handling review.

The inquiry was announced last month, ahead of Mr Jones today advising that a motion to establish the review would be presented to the House of Representatives on Monday.

The Government says the inquiry will inform its broader program of work to address insurance access and affordability, which includes the Disaster Ready Fund investment of up to $1 billion over five years in resilience measures.

The terms of reference say the inquiry will have regard to the following matters in respect of the floods:

• the experiences of policyholders before, during and after making claims;
• the different types of insurance contracts offered by insurers and held by policy holders; 
• timeframes for resolving claims; 
• obstacles to resolving claims, including factors internal to insurers and external, such as access to disaster hit regions, temporary accommodation, labour market conditions and supply chains; 
• insurer communication with policyholders; 
• accessibility and affordability of hydrology reports and assessments to policy holders; 
• affordability of insurance coverage to policy holders; 
• claimants’ and insurers’ experience of internal dispute resolution processes; and 
• the impact of land use planning decisions and disaster mitigation efforts on the availability and affordability of insurance.