Independent MP Andrew Gee has attacked insurers for denying flood claims in his constituency – despite the fact that most insureds did not have flood cover.

Mr Gee, who represents inundated NSW towns Eugowra and Molong, made a series of strongly-worded accusations yesterday as the Federal Government launched a parliamentary inquiry into insurers’ response to last year’s floods across Australia.

Eugowra, a small town 300km west of Sydney, was hit by what was described as a “wall of water” on November 14, and homes and businesses were devastated.

Labelling insurance “a fiasco”, Mr Gee said local residents had been caused heartache by insurers’ “lack of action”.

“We’ve seen stories and heard stories of a very cold‑hearted, mean‑spirited approach, a callous approach,” he said.

Mr Gee, who quit the Nationals Party at the end of last year, had called for the inquiry last month and welcomed confirmation that it will proceed.

“I think the insurance companies have got a lot to answer for, and I’m really pleased that this inquiry will focus and look at the experiences of our policyholders around our region who have, in many cases, been paying premiums for years, expecting that when the worst happened that they would be covered,” he said.

“They’ve now had the doors slammed in their faces.”

insuranceNEWS.com.au understands that Mr Gee wants insurers to pay claims even in circumstances where the damage was caused by floodwater and the insured did not have cover for flood. Such an approach would cause insurers issues with reinsurance, and with regulators.

Mr Gee also believes hydrologists have been “colluding on water reports”.

Eugowra residents have spoken previously about the affordability of flood cover, with some quoting costs of up to $25,000 per year.

As reported yesterday, Financial Services Minister Stephen Jones says the review will provide a “whole‑of‑economy view” of ongoing challenges faced after intense floods as insurers continue to pay out 240,000 claims from record-breaking events across NSW, Queensland, Victoria and Tasmania.

“Natural disasters continue to have a massive impact on the lives of Australians, especially those in rural and regional communities,” Mr Jones said. 

“The inquiry will investigate the preparedness of insurers to respond to the frequency of these events.

“It will also consider supply chain issues, skills, and labour shortages, claims handling, and communication with policy holders before, during and after these devastating events.”

Mr Jones says that while the response of insurers will be examined, the “underlying risk” will also be looked at.

“A big part of the Albanese Government’s approach to this issue is to ensure that we're not putting more houses and more communities in peril.”

insuranceNEWS.com.au has requested an interview with Mr Gee.