Council chiefs have told the Royal Commission into National Natural Disaster Arrangements about their communities’ concerns about the cost and availability of insurance.

Last week Angela Jones, the Director Infrastructure and Environment at NSW’s Richmond Valley Council, highlighted issues with insurance.

She said more than 50% of Richmond Valley was affected by last season’s bushfires, but the cost of insurance meant that many people did not have enough cover.

“We found where people had lost their homes…a lot of them weren't insured adequately,” she said. “We have a very low socio-economic demographic in the Richmond Valley area.

“So generally, if somebody tries to get insurance on a property that may be flood-impacted or be in another risk category such as bushfire, my understanding is it is very difficult to get insurance coverage and, if you could, it would be very, very expensive.

“And, in my opinion, a lot of our community that live in these more rural and remote bushland areas would not have the capacity to obtain adequate insurance from a cost perspective.”

Victoria’s Indigo Shire Council CEO Trevor Ierino told the hearing last week that tourism operators have not been able to claim on Business Interruption policies.

The area – which relies heavily on tourism to support its economy – was not directly hit by last season’s fires, but was badly affected by smoke and evacuation warnings.

“The state provided instructions for all the tourists and visitors to leave the area,” Mr Ierino said. “The immediate aftermath was basically a desertion of our towns…all tourists leaving.

“Then afterwards that period lingered on for some four to six weeks. [There was] heavy, heavy smoke impact, periods of poor air quality or hazardous air quality for some long periods of time.

“By the time there was any sense of the air clearing and it was safe to return to the region, then that season was lost. The kids were back to school.”

Mr Ierino says the usual 160,000 visitors to the area at that time of year fell to 40,000, with spending dropping from $46 million to $14 million.

But he says businesses have been unable to access Business Interruption payments under their insurance policies.

He says that claims were not possible because there were no physical roadblocks and “we weren’t in the right postcode to be declared eligible for insurance”.

The hearings will focus on the responsibilities of states and territories when they resume tomorrow.