Massive insurance bills leave SA Murray flood victims reeling

A massive surprise bill amid the clean-up from SA’s worst natural disaster has left Murray flood victims shattered for a second time.

Insurance companies are slugging property owners in flood-affected areas more than $50,000 to renew their policies in the wake of South Australia’s worst natural disaster.

While insurers are unable to access many areas along the River Murray to assess damage from the 2022-23 floods, clients are still being forced to pay exorbitant prices to maintain their insurance.

Customers have been left shocked and confused by the premium increases that came with no warning and varied from company to company.

Embargoes have also been put in place preventing property owners from being able to shop around, which has left some policy holders with no choice but to cop the price hike.

The revelation comes as the Insurance Council of Australia confirmed 750 SA flood claims had already been lodged.

Bowhill shack owners, Peter and Kimberley Hobart told the Sunday Mail they received a policy renewal letter from Allianz in November that had their premium rising from $2908 a year to $57,431.

“We were shocked, we literally thought ‘they have made a mistake here, they have added a nought,’” Mr Hobart said.

Sue Cornish cleaning up after the flooded River Murray inundated her property on Providence Drive, Bowhill. Picture Emma Brasier

But when he called to seek further clarity and negotiate, Mr Hobart was met with a “brick wall”.

“We tried to claim that we had been good customers, were loyal and all those sorts of things, but we were just told the figure was accurate,” he said.

“I got off the phone and just thought it was ridiculous – a complete lack of empathy. It felt like managers were hiding in their office somewhere and they’ve tasked their minions to just quote the number and say they’re not moving.”

Fortunately the Hobarts’ renewal notice came weeks before embargoes were put in place, which allowed them to engage an insurance broker to find a better deal.

“We got a quote for $5900 from another insurer, which we went with,” Mr Hobart said.

Other shack owners such as Sue Cornish were not so lucky.

Her renewal notice came in February, some time after the embargoes were put in place.

Despite having a shack at Bowhill built on poles above 1956 flood level, Allianz still increased her premium from $2500 to $17,500.

“I doubt very much that we’ve got $17,500 worth of flood damage, so we’d be better off self-insuring,” she said.

Peter Hobart checks on his flooded property at Bowhill. Picture: Supplied

Flood effected shacks on Providence Drive, Bowhill, after the River Murray inundated properties. Picture Emma Brasier

“But we’re just locked in, there’s nothing we can do about it.”

Ms Cornish said she felt for people who won’t be able to afford it.

“This has been my biggest angst during the whole ordeal,” she said.

“I feel for people that are have been inundated and have got severe damage, and they’ve got the big insurance bill to pay as well.”

An Allianz Australia spokesman said the company recently undertook a comprehensive national review of flood premiums based on updated government flood maps, data and flood risk modelling.

“For most customers, this resulted in no change or a modest increase in flood premiums,” he said.

“In some areas, however, the updated flood modelling indicated a much higher flood risk than previously.”

When the Sunday Mail asked Allianz about the specific policies relating to the Hobarts and Ms Cornish, they indicated they would be unable to investigate until Monday.

Providence Drive, Bowhill, after the flooding. Picture Emma Brasier

Treasurer Stephen Mullighan said the government would be “monitoring closely” insurance companies during the recovery phase of this “once in a generation disaster”.

“We know climate change and natural disasters are having a major effect on the insurance industry worldwide,” he said.

“However, we expect insurance companies to act respectfully and compassionately towards customers, many whom have been paying premiums for a long time.

“We urge residents to talk to their insurer, for those who can to shop around, and if they have issues, report them to APRA.”

Morgan property owner Grant Levy said his insurance premium had jumped from $1500 to $10,000.

“There’s no option to shop around and get a better deal, so you’re damned if you do, damned if you don’t,” he said.

“If you don’t, then if you start rebuilding and there’s a second-year flood or a third-year flood, you could potentially lose a lot.”

When it came to making a claim for the damage caused by water inundation, Mr Levy said his insurance company had been helpful throughout the process.

“They have been on the front foot and have put in place people for myself to step me through the process,” he said.

A spokesman from the Insurance Council of Australia said each insurer had their own “underwriting criteria” to determine the risk of individual policies.

Sue Cornish cleaning up after the flooding Murray River water inundated her property on Providence Drive, Bowhill, SA. Picture Emma Brasier

“Given the intense flooding that many parts of Australia have been experiencing over the past two years, some insurers are reassessing flood risk across their portfolio,” he said.

“There are a range of factors putting upward pressure on insurance premiums across Australia, particularly in regions that have a high natural disaster risk.”

One of those factors is the amount of claims experienced in that sector of the insurance industry.

“There have been around 750 SA flood claims lodged, access into flood areas has been difficult, with some areas still inaccessible to insurance representatives and assessors,” a spokesman said.

“As access eases insurers will move into flood-impacted areas to meet with their customers and assess claims.”

Riverland Community Justice Centre is holding a free legal information session in Blanchetown on Sunday night to provide property owners with advice when it comes to insurance.

A solicitor will provide tips on how to negotiate with insurers and how to make complaints.

Flood recovery co-ordinator Alex Zimmerman said these types of sessions were important for people who owned properties along the river.