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Flood costs expose non-insurance

The insurance cost of storms in NSW and Victoria has topped $800 million, according to the Insurance Council of Australia (ICA).

As the tally of claims for the NSW Hunter Valley and Central Coast regions passed 63,000 at a cost of $750 million to the industry, a high level of non-insurance has emerged.

ICA says 20% of residents affected by the NSW storms had no insurance cover.

CEO Kerrie Kelly says the initial assessment of non-insurance in NSW fits in with research showing 26% of all NSW households do not have any form of home and contents insurance.

The NSW storms are now the third most costly insurance event in Australian history behind the 1999 Sydney hailstorm ($1.7 billion) and the 1989 Newcastle earthquake ($862 million, or $1.37 billion in today’s money).

Storms that swept through Victoria’s Gippsland region last month have prompted 1500 claims totalling $50 million.

Ms Kelly says the final figure for the NSW storms will be higher once the commercial and industrial claims are finalised.

“This places the June 2007 NSW storm event as a very significant disaster, with extensive loss and damage to commercial and residential property and vehicles.”

Householders have made most of the claims resulting from the NSW storms, at 65%, and the rest are under commercial, motor vehicle, rural, marine and industrial policies.