‘Insurance catastrophe’ declared as PM warns insurers to deal fairly

Insurance companies and banks have been put on notice by Prime Minister Scott Morrison, as the deadly storm cell pummels the east coast, wreaking havoc on homes and businesses.

It comes as the Insurance Council of Australia (ICA) declared an “insurance catastrophe” for south-east Queensland and NSW, meaning claims from policyholders affected by the floods are given top priority by insurers.

An industry taskforce has been formed to look into issues arising from the extreme weather event, while ICA representatives will work with local agencies, services, and affected policyholders when the dust settles.

The ICA says since February 21, insurers have received almost 15,000 claims and climbing — a 33% increase on yesterdays’ claims figures — while Suncorp had received more than 10,000, mostly from Queenslanders.

Morrison warned that Treasurer Josh Frydenberg and Assistant Treasurer Michael Sukkar would keep a close eye on insurers when northern NSW and Queenslanders begin the arduous cleanup.

“I have asked them to contact all the banks today and the insurance companies and be clear to the insurance companies what our expectations are about their response,” Morrison said.

“I look forward to that being a positive response and that means getting the assessors in. We’ve already started putting advanced assessors in from the recovery and resilience agency to ensure that they can be in assessing the impact on the ground. We are turning around the request from the states immediately.”

Australian Small Business and Family Enterprise Ombudsman Bruce Billson is urging insurance companies to head the PM’s warning.

“We welcome the Prime Minister’s calls for insurance companies to act fairly in relation to flood claims,” Billson told SmartCompany this morning.

“It serves as an appropriate encouragement to insurance companies at what is a very difficult time for small business customers.”

It comes as NSW Premier Dominic Perrottet warned Sydneysiders to prepare for 200 millimetres of rain and flooding in the next few days, saying “the worst is yet to come” in what he called a “one-in-1000 year event”.

ICA CEO Andrew Hall says it’s too early to estimate the insurance damage so far.

“Many property owners remain in evacuation centres and floodwaters continue to rise in many areas, or in others recede slowly,” he says.

“The insurance industry expects the number of claims to rise significantly as policyholders return to their homes and businesses.”