An interim report from the Victorian Government’s inquiry into the October 2022 floods says insurance claim handling delays and inadequate coverage prolong hardship and hinder recovery after natural disasters. 

Efficient insurance processes after a natural disaster, along with comprehensive coverage, are a “key determinant” in the recovery, according to the Legislative Council Environment and Planning Committee, which is to submit a final report by July. 

The interim report says a disaster’s aftermath is marked by prolonged displacement, especially “when hindered by insurance complications, a scarcity of contractors, and difficulties in obtaining essential building materials. These factors collectively contribute to the extended recovery period for affected individuals and communities.” 

The committee is reviewing evidence from 880 submissions and 182 witnesses, gathered over 13 days of public hearings in northern Victoria and Maribyrnong. These insights “underscore the necessity of proactive insurance management post-flood, aligning with earlier discussions on trauma’s enduring impact and the pivotal role of timely support services”. 

The report adds: “The committee was informed that timely insurance processing can alleviate financial strain and expedite rebuilding efforts. However, delays or inadequate coverage exacerbate hardships, hindering recovery for affected individuals and communities. Timely insurance processing is crucial for expediting post-disaster rebuilding.” 

The interim report features testimony from insurance policyholders, including:  

• Deanne McNair: “The emotional pain, coupled with the financial pain and the stresses associated with dealing with insurance companies – all the while living in temporary accommodation – is something people are unable to comprehend unless they were directly impacted.”  
• Nicki Henderson: “Six months on, people are still out of their homes and are getting cold, angry, upset and feeling abandoned by not only the insurance companies but by the Government. Maybe you could come up to Rochy and spend some time in a caravan or shed?”
• Susan Joyce: “The insurance companies have been difficult to work with. They are so happy to take your money for years and years, but not so forthcoming when you put in a claim. They stated Mum’s house was fixable but they wouldn’t fix it and she only received a minimal amount.” 
• Aimee Lindrea: “Insurance companies are very disorganised. Trades come and do a small part, then the next one comes and so it continues. Every single job order must be more paperwork, more time, slowing progress and cost more money.” 
• James Walsh: “We have my parents living in a caravan with no walls in the home. It’s a bloody crazy living arrangement and the insurance companies couldn’t do less to help.”
• Rodney Dimsey: “The lack of progress in addressing our claim has added to the already overwhelming challenges we face in recovering from this disaster. There needs to be a responsible time frame established for insurance companies to respond to individuals who have experienced such losses. It is crucial that insurance companies are held accountable for timely action.”

From Insurance News magazine: After rolling catastrophes and amid intense scrutiny from authorities, how can insurers get it right next time disaster strikes?