Insurers warned to ‘restore their reputations’ as storm-related claims soar past 9000

Insurers have been put on notice as thousands of ex-Cyclone Alfred-related claims are made, with thousands more set to come.

Insurance companies have been urged to use the wash-up of ex-Cyclone Alfred to “restore their reputations”, in a stern warning from the Prime Minister.

As the number of claims lodged in the wake of the storm jumped to 9,000 on Monday, Anthony Albanese also left open the possibility of taking government action to force firms to pay up.

“(Insurance companies) have a social license, and people expect them to make payments in a speedy and effective way when they are due,” he said from Lismore.

“This is a time where insurance companies can restore some of their reputation with the public by acting speedily, and we expect them to do so.

“We are hoping, of course, that they do the right thing. If not, we’ll give consideration to any measures that are required. But we want insurance companies to do the right thing. People take out insurance expecting that they’ll receive support when they need it.”

The jump in claims related to the storm came after 3000 were logged by Sunday, with the Insurance Council of Australia (ICA) saying that number was expected to “increase significantly” in coming days.

Henry Loung at his Spring Street home in Lismore, which flooded in 2022, pays almost $700 a month to insure his home, compared to $150 a month before the floods. Picture: Rohan Kelly

It’s understood Treasurer Jim Chalmers spoke with insurance company CEOs in recent days, outlining the government’s expectations that claims be processed and paid out swiftly.

A spokeswoman for the council said insurers would begin attending disaster recovery centres in the coming days to assist people from stricken areas face-to-face.

“Insurers are already on the ground supporting customers where it is safe to do so and have mobilised their disaster response teams,” she said.

Mr Albanese’s comments come after a parliamentary inquiry found insurers had “failed” their customers in the wake of the devastating 2022 northern NSW floods, leaving some claimants waiting more than two years to have their cases resolved.

“The industry has made significant improvements in its operations since the 2022 floods in response to the Parliamentary Flood Inquiry, the independent Code of Practice review and its own report undertaken by Deloitte,” the ICA spokeswoman said.

Heavy rain has created havoc in the northern rivers region. Picture: NewsWire / Glenn Campbell

Henry Loung, a Lismore resident whose home was devastated in the Lismore floods, is one of those that faced a long battle with his insurance provider after the last major catastrophe.

Three years on he continues to pay the price for the natural disaster in the form of trauma and sky high insurance premiums.

He now pays almost $700 a month to insure his home, compared to $150 a month before the 2022 floods.

“At the beginning people say having insurance gives you reassurance but the … 16 months after (the floods) I had to ring them up every day like a beggar. Saying ‘please do something, release emergency funding, payout so we can pay for accommodation and this and that,” he said.

Originally published as Insurers warned to ‘restore their reputations’ as storm-related claims soar past 9000