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Once a month, a bill to pay Rachel Sirr's home insurance would automatically withdraw from her bank account, until one day the payment bounced.
She did not have enough money in her account because her premium had increased by $70 a month.
"The difference was about 35 per cent, and it happened without me even being consulted," Ms Sirr said.
Her insurer, NRMA, had automatically renewed its policy to insure the home and contents of her three-bedroom brick home in Canberra's south.
On top of the "significant" price hike, it also reduced the sum she was insured for by $65,000.
"So I'm paying more and I'm insured for less," Ms Sirr said.
She called the company to challenge the increase but was told inflation was to blame.
"They said the business is facing higher costs and they have to pass those costs onto consumers," she said.
NRMA's parent company, Insurance Australia Group (IAG), said it had no choice but to increase premiums by up to 20 per cent this year.
It said the surge was the result of a perfect storm of factors.
"Inflation is one consideration that goes into premium increases, as is the ongoing cost pressures we are facing from global supply chain bottlenecks, the culmination of nine major weather events since March 2022, and rising reinsurance costs," a statement from IAG said.
In the past three years, almost 788,000 claims have been lodged from flood and storm disasters nationwide, costing insurers $12.3 billion — payouts that insurers are now trying to recoup by increasing the cost of customer premiums.
"Today, gross natural perils and reinsurance costs make up 19 per cent of every dollar of premium we collected, this is compared to 13 per cent in 2016 and 16 per cent a year ago," IAG said.
In other words, one in every 25 Australians has lodged an insurance claim because of extreme weather since 2020.
Sharanjit Paddam, a principal actuary in climate risk, said in the short term the cost of rebuilding damaged homes would see all policyholders pay a price.
"We see this phenomenon when there are natural disasters," he said.
"It's called demand surge where there is a big demand for local builders and local materials that flows through to higher insurance costs."
Mr Paddam said that cost burden was only exacerbated for policyholders because about one million home owners did not have insurance, mostly because it was unaffordable.
"About 10 per cent of Australian households faced insurance premiums that were more than one month's worth of income, and that's gross income, so that's a fairly hefty chunk of their household budget," he said.
"What we're seeing more broadly is the impact of climate change that is starting to flow into increased natural disasters. And we expect [that] will flow ultimately into higher insurance costs and higher insurance premiums."
It is a concern ahead of a major bushfire season forecast this summer due to record-high global temperatures and disruptive weather patterns brought on by El Nino, which was declared by the World Meteorological Organisation last month.
"If emissions carry on going the way that they are, and we don't see a rapid reduction in emissions … all the scientific evidence is pointing towards increased insurance premiums," Mr Paddam said.
"Insurance premiums really are the canary in the coal mine here. They are the first way that we're going to see the impacts of climate change at a household level."
In the meantime, Ms Sirr says she is already feeling the pinch.
"It has a massive impact on the grocery budget, $70 is a third of a week's worth of groceries for a family," she said.
"I'm on quite a good income but we are getting more and more stretched, and we're meant to be the normal 'middle' [income]," she said.