Losses from the “once-in-a-century” floods in Townsville are mounting quickly as authorities continue to assess the scale of damage in the north Queensland city.

The Insurance Council of Australia (ICA) today raised its insured loss estimates to at least $45 million, from $16.7 million yesterday when it declared the event a catastrophe.

So far, 3500 claims have been recorded and the figure is set to rise as some areas were hit by a year’s rain in just a few days.

ICA expects the number of claims to increase sharply over the next few days when policyholders return home, adding claims are “rising by the hour”.

ICA has also allayed residents’ concerns over whether the event will be covered by insurers. Comments by a politician sparked confusion over whether flooding caused by water released from the Ross River Dam would be covered.

“Insurance policies that include flood cover as part of their home and contents insurance will reference this standard definition. Nationally, the majority of home building and contents policies purchased, about 94%, include flood,” CEO Rob Whelan said.

“There may be a small percentage of policyholders who have decided to opt-out of flood cover at time of purchase or chose to buy a policy that excludes flood.

“Those policyholders may need to have their claims tested to determine if their claim meets the standard flood definition.”

S&P Global Ratings is confident insurers in Australia, backed by robust reinsurance and capital surplus, are financially equipped to handle the expected deluge in claims for flood-related damages.

It says Queensland-based Suncorp has the combination of quota share and natural hazard aggregate reinsurance to limit any material impact on earnings.

“A substantial capital buffer and strong balance sheet continue to underpin the group's credit quality,” the ratings agency says.

IAG is not expected to be widely affected as it is underweight in the Queensland market and associated flood cover exposures.

“In our view, the scale of the event is unlikely to trigger the first layer of its 2019 catastrophe program where IAG retains the first $250 million of each event,” S&P says.

Thousands of residents in Townsville and surrounding areas are still waiting for the waters to recede.

Queensland Premier Annastacia Palaszczuk announced today a clean-up has started but warned the crisis was not over.

“It is very important for people to remain out of those flood waters, do not go swimming in those flood waters,” she said.