Insurers will probably cover the cost of most water-damaged properties in south-east Queensland and northern NSW with claims forecast to meet existing terms for storm cover.

Floodwater from heavy rain has destroyed crops, isolated thousands of residents and damaged scores of homes, cars and businesses in the two states. At least two deaths have been attributed to the wild weather.

Latest figures from the Insurance Council of Australia show insurers have received 9500 claims estimated at $39 million, according to “very early” estimates.

The costs to insurers are expected to rise as floodwater recedes and loss adjusters gain access to affected properties.

GIO Executive Manager for Home Insurance Dennis O’Brien says the event “could have been worse” – and while his company automatically covers flood, he says most claims will be attributed to a storm event.

“While some rivers have breached their banks a lot haven’t,” he told insuranceNEWS.com.au. “We’re seeing the old case of storm run-off in most cases.”

Suncorp last week announced it has handled 4500 claims from its personal and commercial lines companies, at a maximum cost to the company of $10 million under existing aggregate reinsurance arrangements.

IAG companies including NRMA Insurance and CGU have received more than 3000 claims from customers in south-east Queensland and northern NSW.

“The majority of claims lodged relate to minor property damage like damage to plaster, paintwork, carpets and contents,” an IAG spokesman said. “Some commercial and motor vehicle damage has also been reported.”

She said it was too early to determine the cost to the company or whether the event will be classified as storm or flood.

“Where assessors have access to properties, each claim is being assessed on a case-by-case basis.”

Zurich Australia CEO David Smith says the commercial insurer does not face a large exposure despite its offer of automatic flood cover.

“We haven’t had a lot of reported claims and until we get access to the region and some of that water subsides it is difficult to assess,” he told insuranceNEWS.com.au.

Insurers’ varying treatment of storm events was highlighted in a report in The Australian. Coffs Harbour resident Leanne Grasby discovered her $7000 claim for damaged contents was knocked back by Auto and General Insurance who deemed it a flood event while her neighbours made a successful $6000 claim with NRMA Insurance under storm water provisions.

Also see ANALYSIS