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Flood victims in the New South Wales central west have told a federal inquiry they felt pressured by the insurance industry to accept lower cash payments after facing of months of delays.
The House of Representatives Standing Committee on Economics is examining insurers' responses to four major flood events in 2022, which affected Queensland, New South Wales, Victoria and Tasmania.
A public hearing is being held in Eugowra today following the committee's visit to nearby Molong on Tuesday.
Both towns were devastated by floodwater following torrential rain in November 2022, with locals in Eugowra reporting a tsunami-like flood through the small town.
The inquiry has previously visited south-east Queensland, Victoria and northern New South Wales.
Josh Dawson, his partner and six-month old moved into their first home in Eugowra six months before the flood.
Mr Dawson told the committee that after his entire home was gutted by the flood his insurance provider, Allianz, sent a hydrologist.
They concluded the damage was caused by flooding from the Mandagery Creek, making him ineligible for coverage.
Mr Dawson said it was clear the water had not come from the creek, but rather the nearby hills.
"It is almost as if the insurance companies own the hydrologists, they pay them to give them an answer," he said.
"If you are employing me and paying me, I am going to do everything I can do to make you happy."
After his claim was knocked back, Mr Dawson took his case to the Australian Financial Complaints Authority (AFCA).
After unsuccessful efforts to secure a hydrologist to independently review his claim, the regulator found in favour of the insurance company.
Mr Dawson said it was vital that decisions on claims were not made by hydrologists supplied directly by the insurers.
"You could see the water had come down from the hills … I was at a disadvantage [not having a hydrologist]," he said.
"If they are independent they are not going to favour just the insurance companies — there are more opportunities to tell the truth."
'Exacerbated their trauma'
Residents in Eugowra were given the opportunity to make community statements at the end of the inquiry.
Hugh Ellis told the committee the treatment of local residents by insurance companies was not good enough.
"Everything is set up in the insurance companies' favour," he said.
"I know insurance companies need to make a profit but they need to understand we are not just a policy number."
Legal Aid NSW solicitor Ma'ata Solofoni told the committee they had assisted more than 800 people across the Cabonne Shire Council.
She said there had been clear issues across the board with how policyholders had been treated following the floods.
"Poor communication, poor claims handling, disputes around flood versus stormwater, reliance on inaccurate hydrologist reports, maintenance issues and the unaffordability of flood cover," Ms Solofoni said.
"The experience with the insurer has only exacerbated their trauma."
Not-for-profit organisation CatholicCare Wilcannia-Forbes has worked with more than 200 residents in the region dealing with their insurers.
Financial counsellor Louise Cormie told the committee the response of providers had devastated the community.
"There has been a colossal breakdown of trust between the insurers and policy holders," she said.
Molong businesses pay their own way to reopen
Molong Post Office and Newsagency owner Kaylene Philpott told the inquiry on Tuesday she was ready to give up on her business after her insurance claim experience.
"I was quite prepared to walk away," she said.
"But when you look at the community … at the demographic, I am now the bank, I am everything.
"If I am not there, what do they have?"
Ms Philpott told the inquiry she was still fighting for insurance.
"As for our equipment – our $20,000 photocopier – they're asking, why was it on the floor?"
"When you get 2 metres of water through [your property] it doesn't matter what's on the floor," she said.
Community support keeps businesses in town
Cheney Suthers Lawyers gave evidence that it had spent more than 250 hours of pro bono work to get insurance payouts for dozens of Molong businesses.
Solicitor Kirsty Evans said the delays and complicated claims processes had had a significant impact on the town.
"We had businesses that did not reopen," she told the inquiry.
And she said those that had reopened had pulled money off their home loans and farming businesses.
"We're self-funding our return at the benefit of insurers so we can get back to business," she said.
The committee heard one gym owner would not still be operating in Molong if it was not for the community supporting her through the recovery and insurance process.
Downtown Fitness owner Heba Elkurdi said it had been traumatising making an inventory of more than 150 gym items that were damaged in the flood to prove her losses.
"I had to describe each item individually, what I paid for it, and what it was worth now," she said.
"You get pushed into a corner and you get desperate, and you feel like you need to take whatever they give you to recover [what was lost]."
The inquiry will hold public hearings in Richmond and Parramatta later this week.