Insurers order halt to clean-up efforts until inspectors have visited

The trauma for flood victims is being compounded by some insurance companies insisting home owners delay cleaning up until after inspections.

The trauma for flood victims is being compounded by some insurance companies insisting home owners delay cleaning up until after inspections.

As Queensland Premier Anna Bligh called for a review of insurance protection against flood, it emerged that many devastated residents had only now discovered they were not covered for the disaster or would have to wait for an inspection before cleaning up their homes.

So far, Queensland flood victims have lodged claims worth more than $365 million but the figure will escalate when those from Toowoomba, Ipswich and Brisbane come in.

Costs to insurance companies are also expected to increase substantially when hefty claims are submitted by industrial and mining companies whose operations have been severely curtailed by the floods.

More than $71m had been paid out so far, the Insurance Council of Australia said yesterday.

Several residents in the Lockyer Valley, which had borne the brunt of the loss of life, have told The Australian that insurers are denying their claims that what occurred had been a "storm event" after last Monday's deluge built up in Toowoomba and cascaded off the mountainside into their communities.

"It's hard to believe that Australia can't do better than this," Ms Bligh said. "When you see the scale of this and understand the havoc and heartache this has brought, it is hard to believe we can't find a better system. There are some big policy questions out of this."

Ms Bligh said many people had paid their insurance premiums believing they were covered for floods and "now they find this is the wrong kind of flood".

The insurance bill is expected to run into the billions of dollars, with 3.1 million people living in the 51 areas labelled disaster zones.

Major insurer Suncorp said it had provided automatic flood cover since 2008 and advised residents to move ahead with the clean-up and throw out damaged contents.

However, some of the smaller insurers are telling people they will have to bear the losses themselves.

Several residents of the Lockyer Valley, who did not want to be named, said they had been told to postpone clean-up work or they would not be covered.

"It is devastating. We can't hold on, we have to move back into our homes," one resident said.

The state MP for Lockyer, Ian Rickuss, said he had a "line-up" of barristers and solicitors who were willing to take on the insurance companies.

"It is true that some of the smaller companies are telling people throughout the valley to wait for the assessors to inspect the homes before they clean up," he said.

"That is ridiculous. These people want to get on with the job and get back into their homes. They don't need this."

Mr Rickuss said the legal fight could centre on the emerging dispute over whether the disaster was a flood or storm event.

"Some people are being told that they were not covered for flooding -- but in the Lockyer it was clearly a storm (that caused the damage)," he said.

"It rained all morning and built up in Toowoomba and poured down into the valley in a straight line.

"It didn't go into the creeks. The water was trying to get into the creeks, not out of them."