IAG will pursue recovery action on behalf of policyholders who lost their homes or suffered property damage in last year’s Blue Mountains bushfires.

Communications Manager Mariana Cidade says proceedings will begin shortly.

Residents affected by the Springwood-Winmalee fire have initiated a class action against Endeavour Energy, but IAG says significant resources are needed to take on the NSW power company.

“We are well-resourced and have extensive experience in recovery action,” Ms Cidade told insuranceNEWS.com.au.

IAG customers will not need to pay for the recovery action, and Endeavour denies responsibility for the fires.

“We believe we’re in a better position to manage this recovery action in our customers’ best interests against those responsible for the bushfire, which we believe at this stage to be Endeavour Energy.”

“We are taking a holistic view and looking to recover uninsured losses, underinsured losses and insured losses,” Ms Cidade said.

“For uninsured losses, this includes property that was not covered by insurance, or where the insurance payout was not enough to cover damage to their property.”

IAG customers suffered more than $60 million of damage to homes, vehicles and businesses in the fires, she says.

Lawyers representing residents in the class action say their clients are angry, disappointed and confused by IAG’s move.

“We believe the belated steps in respect of this proceeding… will adversely affect residents,” Maddens Lawyers senior partner Brendan Pendergast told insuranceNEWS.com.au.

“Their entitlements to statutory interest on damages recovered will be lost if they are opted out of the present proceeding.”

The class action alleges the Springwood-Winmalee fire started when a poorly maintained tree fell on electrical conductors on October 17 last year.

An Endeavour contractor issued hazard notices to two Springwood property owners, asking them to trim the tree.

Maddens says state-owned Endeavour was obliged to ensure this was carried out.