NSW Floods: All but impossible to insure properties in Forbes, Molong

Residents of rural towns like Forbes inundated in recent floods have been left high and dry by insurers, who are placing blanket bans on policies – and an algorithm is making the final call.

NSW towns that have repeatedly bounced back from flooding since being settled in the mid-1800s now face an uncertain future as insurers abandon them, leaving residents in no man’s land.

Homeowners in central western communities such as Forbes and Molong are receiving letters and calls from insurers notifying them that flood protection policies will not be able to be renewed.

A Forbes resident, who asked not to be named, told The Daily Telegraph of receiving an email from their insurer on October 31 saying flood cover would not be renewed beyond December because the risk to their property had been reassessed.

“It’s very frustrating as we’ve been a loyal customer to them for years,” they said.

Another Forbes resident, who also requested anonymity, said an insurer had declined to renew not only flood cover, but any form of protection. “I’ll have to move,” the resident said.

A Forbes man and his dogs Jet and Charlie were forced out of their home by floodwaters. Picture: Dean Marzolla

Forbes Mayor Phyllis Miller said one of her children could not get protection against flood.

“They (the insurers) said there was a moratorium on (postcode) 2871,” she said.

The prospect of people living in long-established areas being unable to obtain insurance was “horrendous,” Ms Miller said.

Insurers are telling residents there’s a moratorium on flood protection in the community amid recent events – despite the area’s historically infrequent flood events. Picture: Dean Marzolla

Forbes is currently facing its worst flooding in 70 years.

Residents in areas of Molong, near Orange, are also being told their properties are no longer insurable, the mayor of the area, Kevin Beatty, said.

The industry would soon deliver a similar verdict for other towns in the Cabonne Council district, such as Cudal and Canowindra, Mr Beatty predicted.

Without flood insurance, the viability of these communities was under threat, he said.

The Newell Highway, south of Forbes on November 21. Picture: Supplied

Floods in Condobolin, around 100km northwest of Forbes, on November 20. Picture: Supplied

“It brings the value of the place down,” Mr Beatty said.

“If people can’t get insurance against flooding they can’t get loans.”

An Insurance Council of Australia spokesman acknowledged some companies were withdrawing flood protection. The spokesman said that in other cases, flood cover was out of financial reach, with annual premiums of $20,000 to $30,000.

“On any measure that is unaffordable,” the spokesman said. Homeowners needed to check with other providers. “People should shop around,” he said.

Condobolin is in the firing line of the tide of floodwater along the Lachlan River. Picture: Instagram

The Insurance Council was pushing to “improve the resilience of those areas which are at most risk of extreme weather because of climate change,” the spokesman said. This could be done by building levees or sea walls in coastal regions.

Raising houses off the ground was another remedy, along with “wet flood proofing” homes, which is where gas and electrical services, as well as spaces such as kitchens, are relocated to the second storey and the lower level gets tiled flooring.

Public buybacks of homes and “relocation to somewhere safer and insurable” was a further part of the required response, the spokesman said.

“We want more Australians to be insured and the risk profile of those locations to be lowered,” he said.

There are fears community resilience will be lost if residents can’t insure their homes. Picture: Dean Marzolla

Forbes Mayor Ms Miller said a joint federal and Queensland government scheme that helped pay for resilience works on homes offered hope.

Ms Miller said she had raised the insurance issue last week with then Acting Prime Minister Richard Marles when he visited the town.

In Canberra on Monday, Treasurer Jim Chalmers told parliament: “I say to people in flood-affected communities, your government will be there for you, you are not on your own, communities will need to rebuild, the bill will be substantial, and the federal government will play its part and pay its share.”

Eugowra, November 18: Members of the Defence Forces line up to be fed at a makeshift community centre. Picture: Jenny Evans/Getty Images

Forbes residents whose homes are not in danger of flooding also appear to have found themselves on the wrong side of blanket bans by insurers. The Telegraph understands that numerous insurers stopped issuing new policies or permitting changes to cover throughout Forbes as far back as December last year – regardless of whether properties were a flood-risk.

A local source said the bans were put in place on advice from a weather forecasting company Early Warning Networks (EWN), which sells a product to insurers called “Embargo”. According to the EWN website, Embargo can identify areas “so that no new insurance policies can be taken out in these areas until we issue an ‘all clear’ alert.”

The Daily Telegraph understands insurers that use Embargo received a warning about Forbes in December 2021. An all-clear was issued but a further warning was then made several weeks ago.

The ban is believed to have applied to all parts of Forbes – even higher ground around the hospital in the town’s south, as well as northern areas near the high school. There is no record of either of these areas having ever flooded.

CEO and major shareholder of EWN’s ASX-listed parent company Aeeris Ltd Kerry Plowright said advice to insurers was confidential and that it was up to insurers to decide who was offered cover.