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Flood inquiry: rural communities criticise ‘cultural divide’ 

People from central-NSW shires Forbes and Cabonne have told the federal flood inquiry that insurers displayed a “culture that does not understand rural and regional Australia” when handling claims in 2021 and 2022.

Today’s session in Molong heard from flood-affected residents, council members and community groups who criticised insurers’ inaction, poor communication and insistence on settling claims with cash.  

Cheney Suthers Lawyers Director and Solicitor Kirsty Evans, whose firm helped 12 businesses pro-bono, said the matter is “more than a financial argument, it became a cultural one”.   

“In every aspect our community has been let down by insurers with systemic failures of information sharing, action, follow-up and resolution,” she said.  

“A failure to meet obligations to inform about their policy, a failure to communicate with their clients on an ongoing basis, a failure to deal with claims in a clear and concise manner, and a failure to be in the community at a time of crisis, and lastly a failure to know their own product.”  

Ms Evans said insurers were out of reach for many residents, showing little presence or awareness of the community’s situation. 

“People pay a premium, they pay for insurance, they should be entitled to get what they paid for ... It shouldn’t take regional communities to come together to pick up the tab. 

“We need insurers to give back and come to the party.”  

Cabonne Mayor Kevin Beatty said, among other issues, residents faced lengthy delays and “unrealistic quotes” due to insurers assigning city-based assessors.  

“Given that our [area] is located four and a half hours away from Sydney, not only does it add cost to insurance companies, which is inevitably pushed onto the insured, but the assessments are priced at an urban cost, which doesn’t account for the cost of freight, time of available materials, labour, and results in unrealistic quotes,” he said. 

Council members from nearby Forbes Shire attacked “predatory” insurers, saying companies understood many young homeowners were reliant on insurance tied to their mortgages, and showed no urgency in handling claims.  

“Insurers left things long-winded, brought people in on their time with no rush, and that forced a lot of people to consider or take a cash payment ... and I know that anyone who did take a settlement is well short of how much they need to rebuild their property,” Mayor Phyllis Miller said.

“We’re really annoyed with insurers in relation to what’s happening in our shire and its recovery ... it is appalling that they are driving people to their last resort to accept cash. That is wrong.”  

Ms Miller said she will be happy to “try anything” recommended by the inquiry if it eases costs and provides fair outcomes for her community.  

“If it’s going to help the insurer and the ratepayer, then yes. The insurance companies need to know that we want to work with them because, right now, they are working individually. 

“We want to work with them to get the best outcome for them and us.”  

The hearing was the first of four held across NSW communities this week. The inquiry committee will be in Eugowra tomorrow, Richmond on Thursday and Parramatta on Friday.

From Insurance News magazine: After rolling catastrophes and amid intense scrutiny from authorities, how can insurers get it right next time disaster strikes?