Owners of homes and businesses destroyed by the Great Ocean Road bushfires will receive assistance to rebuild under a memorandum of understanding between the Insurance Council of Australia and the Victorian Government.

The memorandum provides for contractors to clean up bushfire sites where the property owner or their insurer elects to use the service.

Insured property owners will be required to pay a maximum of $25,000 for the clean-up – which will be deducted from their insurance cover – with any amount exceeding that paid by the Government.

In the case of non-insured property owners, the State Government will pay all costs.

The memorandum recognises that clean-up costs can be very high, particularly on steep sites or properties containing asbestos.

It will enable policyholders to use more of their insurance cover for rebuilding.

The bushfires on Christmas Day led to insured losses of $86 million from 482 claims, including 185 residential building claims.