A consumer backlash has started against insurers who have introduced compulsory flood cover.

Politicians representing country Victorian electorates have sought meetings with insurers in response to anger about premium increases and consumers’ inability to opt out of the cover.

Nationals MP Tim McCurdy, whose Murray Valley electorate borders NSW, says constituents whose properties have no flood risk are seeing their premiums double.

RACV Insurance and CGU are among companies that have made flood cover a standard inclusion this year, with CGU CEO Peter Harmer saying automatic cover will remove ambiguity when a property is damaged by storm or flood.

RACV Insurance, which was lauded last year for making ex gratia payments to flood-affected policyholders, is now incurring the wrath of those who cannot opt out of the compulsory coverage.

GM Paul Northey says the company considered an opt-out provision but decided to make flood cover a standard inclusion so customers can be sure they are covered.

“Our view is that our members need absolute certainty that they are covered whether it be for storm or for flood,” he told insuranceNEWS.com.au.

“We wanted to remove the anxiety and stress that might occur when they need to claim, when they previously had to go through a process of determining what caused the damage before they knew whether or not they were covered.”

Mr Northey says the decision was prompted by widespread community concern following last year’s Victorian and Queensland floods.

He says most customers will notice a minimal impact to their premium but some do live in flood-prone areas and their premiums reflect the risk. This is a fairer solution than some customers cross-subsidising others, he said.

The Insurance Council of Australia says there is robust competition in the home insurance sector and consumers can negotiate with their insurer or shop around.

A spokesman told insuranceNEWS.com.au some insurers are offering consumers peace of mind by making flood cover a standard inclusion.

Mr Northey says RACV has had constructive meetings with the Victorian MPs who have raised concerns.

“RACV is committed to working with all levels of government to find initiatives and solutions which will make insurance more affordable for everyday Australians,” he said.

Last year’s Natural Disaster Insurance Review recommended that all home building policies include flood cover. The Federal Government is considering the recommendation.