Banning development in serious flood zones and buying back existing properties that are at high risk are among 86 recommendations of a federal government inquiry that probed how insurance companies responded to major Australian floods in 2022.

The inquiry's report, handed down on Friday, found evidence of systemic problems following severe flooding across Queensland, New South Wales, Victoria and Tasmania, including inconsistent decision making, poor-quality expert reports and long delays.

More than 300,000 insurance claims were made over the flood events, totalling almost $7.4 billion.

The report concluded insurance companies "failed too many people". 

Development bans proposed

Inquiry committee chair and Labor MP for Fraser, Daniel Mulino, said it was crucial the government intervened to stop development in areas with a 1-in-100-year flood risk.

"More areas are going to become 1-in-100 over time," he said.

"We have to figure out a way to deal with our housing challenge without building on floodplains."

Mr Mulino said the housing crisis complicated implementing this recommendation, but action must be taken.

"It makes the task a bit harder, but we have to as a nation say we are going to solve the housing affordability challenge, but by putting housing in appropriate areas," he said.

The inquiry also recommended states and territories develop buyback and resilience programs for households with very high flood risks that could not be mitigated.

Among the recommendations about insurance was a call to improve affordability for existing policyholders with high flood risk properties, that insurers cover the cost of temporary accommodation while claims were dealt with, and greater clarity for policyholders on rights and risks of cash-settlement offers.

The inquiry also recommended insurance claims be accepted if an insurer had not made a decision on an outcome within 12 months.

Calls to mandate code of conduct

Solicitor Kirsty Evans, who gave evidence to the inquiry in May and assisted a dozen small businesses in the town of Molong with their insurance claims, believes the recommendations do not go far enough.

Committee member and independent Calare MP Andrew Gee said forcing companies to sign up to the code of practice was a "no-brainer," and is one of 38 recommendations he filed in a dissenting report.

"To me, that is one that is crying out for some real change and making sure that everyone, no exceptions, signs up," he said.

Mr Gee has urged the insurance industry and the government to "get cracking" on implementing the dozens of recommendations, and pass legislation on them this term.

Policyholders feel like failures

Northern Rivers resident Aveley McCann's home on the outskirts of Lismore was damaged by the 2022 floods, but repairs under her insurance claim are yet to be completed. 

"I've got doors that don't close in the house and it's almost three years later," she said. 

Ms McCann said the inquiry's recommendation for standardised definitions for terms such as 'pre-existing damage' would have made her original claim less complicated. 

"If I'd had some of those definitions really early, it would have made the process easier," she said.

"I feel like I've failed." 

The inquiry, which was launched in August last year, heard evidence from south-east and northern Queensland, northern and central NSW, the Hawkesbury near Sydney, Tasmania and northern Victoria.

Written submissions were made and public hearings were held across the country in flood-hit communities such as Caboolture, Lismore and Eugowra, with dozens of residents expressing their despair about the difficulty of resolving claims.

Ms McCann said the onus was now on the government to act.

"We've seen with these inquiries where they adopt some of the recommendations, but not the ones that are harder to enforce," she said.