Suncorp and Youi are on the back foot as the Hayne royal commission, which resumes today in Brisbane, examines their conduct around natural disaster insurance.

On ABC’s 7:30 last week the insurers drew fierce criticism over the handling of property damage claims in north Queensland caused by Cyclone Debbie.

The Insurance Council of Australia says less than 0.5% of claims were referred to the Financial Ombudsman Service, but it acknowledges there is room for improvement.

Spokesman Campbell Fuller told insuranceNEWS.com.au: “The insurance industry accepts that a small number of claims could have been managed more effectively.

“Learnings from Debbie will be used to improve future processes to support catastrophe claims management.”

The ABC says Suncorp increased a payout by $100,000 after a couple sought help from their federal MP George Christensen. The couple say Suncorp cut the scope of works from $34,000 to $15,000, which they rejected, and repairs to the property have finally started after more than a year of wrangling.

“There have been problem cases we have seen from just about every insurance company,” Mr Christensen told the program. “Pretty substandard assessments that required reassessment, reassessment and reassessment before it got anywhere near what the scope of works should be in terms of what has got to be fixed.”

Suncorp declined to comment on the matter because it is now before the royal commission. A spokesman says the insurer is “committed to supporting the royal commission and welcomes any measures that will deliver improved outcomes for our customers”.

In a case involving Youi, damage to a property it insured has not yet been repaired and the house is uninhabitable.

Owner Mel Deacon says Youi installed an ill-fitting tarpaulin over her home’s broken roof, which caused more destruction, including mould damage, when heavy rains came.

She successfully complained to the Financial Ombudsman Service when the insurer refused to fix the additional damage.

Her lawyer, from the Mackay Regional Community Legal Centre, says Youi has not complied with an ombudsman directive to obtain new repair quotes for the damage.

Youi made a $161,000 payout to Ms Deacon, who claims the actual cost of repairs is more than the $270,000 for which the home is insured.

The insurer says Ms Deacon called the night before Debbie struck to buy additional cover for her property, which was subject to an embargo.

“It is common practice for insurers to place embargoes on new insurance or increases to sums insured prior to an event that is likely to happen,” the spokesman told insuranceNEWS.com.au.

“Despite the… exclusion, Youi honoured Ms Deacon’s building claim.”

The Insurance Council says it is not in a position to comment on the cases aired by the ABC.