Brought to you by:

Flood probe eyes stronger regulation after Lismore ‘horror stories’

Evidence presented in Lismore last week around insurance claims handling after the 2022 floods was “very concerning” and revealed “things we need to strengthen regulatory arrangements around”, federal MP Daniel Mulino says. 

The House of Representatives Standing Committee on Economics inquiry into flood responses visited the northern NSW town on Thursday after two hearings in Queensland earlier last week. 

“We heard of a number of people who felt like they were being bounced around for month after month,” committee Chair Dr Mulino said. “There are a number of cases of individuals that still have not had their claims resolved more than two years after the fact.” 

He says regulatory arrangements “aren’t strong enough” in some areas. 

“We even heard about people who felt that without their consent their property is being entered into and valuable parts of their house were being taken away. These are all things that we need to strengthen regulatory arrangements around. 

“That could be an important recommendation. One way to promote more accountability is to report more transparency about how many cases are unresolved by that insurer.” 

Lismore Mayor Steve Krieg told the inquiry the demand for individual scope of repairs reports had been too onerous, insurance companies were poor to communicate, and assessment processes were slow, often with conflicting advice from different assessors and hydrologists “neighbour to neighbour, company to company”. 

“We're dealing with an industry built around risk that has suddenly become very risk averse to the point where the 2480 postcode immediately after the event became an insurance blackspot,” Cr Krieg said. “Why do we have to have individual reports on the 700-square-metre blocks all the way up and down the coast. It’s costly, it’s inconsistent, and it’s not fair. It’s devastating and traumatising for people who are still stuck in a holding pattern.” 

East Lismore resident Kate Olivieri told the committee she called police over the practices of builders on her flooded property and she now feels “insurance in its present state is a scam and my husband and I were scammed”. 

The insurance-appointed builders “broke in and destroyed our house to the ceiling”, she said.  

“My husband caught six men stealing our late-1800s historical doors and walls. When he confronted them and asked for ID, they didn’t give him any. They told him, ‘Mate, it’s an insurance job – take it up with your insurer.’ We reported them to the police and were told it was a civil matter and they wouldn’t get involved.”  

She had “paid for a service to protect our home and instead it was damaged”. 

“The way that insurance and builders work with post-disaster communities to rebuild has to change and be accountable instead of destroying vulnerable people and the properties that insurers are paid to fix,” Ms Olivieri said. “I would advise people to save their money.” 

Lismore MP Janelle Saffin closed Thursday’s proceedings by telling the committee: “What you've been hearing today are real-life horror stories.” 

She recommended standardising “clearly understood classifications” of flood and storm cover.  

“You’ve heard from some people still fighting with insurers, living in limbo, and people whose houses were stripped. The insurance industry is currently not fit for purpose and failing those who rely on it most. 

“People still don't realise they’re not covered for certain things ... it’s almost criminal. I don’t expect insurers to be Mother Teresa, but I do expect them to offer a competent and competitive service.”