Flood victims in central Victoria suffered from inconsistent advice from insurers and hydrologists, the House of Representatives inquiry into the insurance response to disasters heard last week.

The Social Policy and Legal Affairs Committee’s inquiry heard that some claimants are still waiting for settlements from the January floods and often have not been properly informed about internal dispute resolution or the Financial Ombudsman Service.

Many people appearing at the inquiry have questioned the independence of hydrologists and how they could determine the cause of inundation, given their delay in reaching affected areas as well as the complexity of the events.

Some people appearing at the inquiry have called for a panel of independent hydrologists whose reports could be used by all insurers.

Panel member Sharman Stone MP, whose Victorian electorate covers the flooded region, said water came from many sources during the event and claimants found themselves having to fight hydrologists and insurers over how their property had been inundated.

Real estate agent Alan Getley, who manages about 40% of the commercial properties in Charlton’s main street as well as houses, said many businesses had changed their insurer once they became aware of how policies differed.

“They have been caught short and found that they are not covered for a lot of things and have not qualified for some of the grants,” he said. “Business people are more aware of what is available and what is out there in the policies, and they are reading them much more thoroughly.”

He told the inquiry premiums have not changed much – by probably less than 15% – but a financial counsellor with an Anglican church agency, Ross Smith, said premiums in Rochester have risen significantly, with one going from $800 to $6000. “Basically companies are saying, ‘we don’t want to insure you’.”

Mr Getley said he dealt with 10 insurers, and one sent two different hydrologists to deal with two neighbouring properties and received differing assessments.

“One of my landlords had a policy with a company that covered absolutely everything, and I had another lady who only had residential insurance with the same company and she never got a cracker.”

Council officers appointed to help communities recover also spoke of how they had to act as advocates for people who they said became worn down by the stress of the flooding and dealing with insurers.

Clients were reluctant to call their insurer for fear of using the wrong language and having their claim dismissed over the phone, or relied on donations such as those provided through the Red Cross and gave up on their insurer.

Ex gratia payments from some insurers were seen as “hush money.”

Victoria Legal Aid lawyer Jenny Lawton told the inquiry that floods result in “such a complex claim that consumers are often very easily defeated”.

When the committee moved to Strathewen, where 23 people died and 80 homes were lost in the Black Saturday bushfires of 2009, there were calls for insurance company staff to receive training in dealing with clients affected by trauma and grief.

The experience of bushfire victims was generally more positive than in flooded regions. Witnesses said insurers had sent staff to relief centres, and one person reported that some insurers’ response had been excellent.

Strathewen Community Renewal Association Chairman Malcolm Hackett said he asked residents whether their insurer provided clear information about the extent of the cover when they first took out the policy.

“One person was not sure and everyone else said no, including me. All I can say is that I think it is just a silly process.”