Insurers blame councils for flood damage

The fight over who is to blame for the damage from the Queensland floods has begun.

The Insurance Council of Australia says the local and state governments should and could have done more to protect their communities from flooding.

Nearly 10,000 claims have been lodged and the damage bill is $116 million and rising.

Brisbane-based Suncorp, the owner of AAMI and GIO, is set to be the worst affected of the major insurance companies, already fielding about 4000 claims for flood and storm damage.

Insurance Council of Australia CEO Rob Whelan says some of the damage could have been avoided if the state and local governments had done more.

He said the state government's flood mitigation budget was not enough.

"$40 million is good but it needs way more than that," he told ABC's Lateline program on Tuesday.

"Let's take a levee for example, $15 million roughly to build a levee, but that may actually save that community $100 million."

Mr Whelan singled out Brisbane and Ipswich as councils that could have done more, especially by preventing development in certain areas, or insisting that homes be built on stilts.

"Mitigation works and control of certain flood areas and prevention of development in certain areas actually will increase the overall level of protection in the community and lower the overall level of risk, which goes to the premiums and the costs," he said.

"If you continue to build developments on a flood plain, ultimately they're going to be affected and that's what we've been doing for the last 20, 30, 40 years."

The comments outraged Ipswich Mayor Paul Pisasale, who says Mr Whelan is in for a war.

"The whole of Australia, the whole of Queensland and all of these people are hurting and you want to come in and start the blame game," he told ABC.

"It's very un-Australian."

Mr Pisasale said the council had spent hundreds of thousands of dollars on flood mitigation and had stringent town planning requirements.

He said he would talk to federal Financial Services Minister Bill Shorten seeking further reforms to the insurance industry.

Queensland Premier Campbell Newman doesn't have a problem with a debate about what more could be done for flood mitigation, but questioned the appropriateness of the timing of Mr Whelan's comments.

He said a statewide flood mitigation program is underway, where local government chips in $20m and the state $40m.

"We're getting on with it," he said.

"Would we like to put more money in? Yes.

"More needs to be done to find engineering solutions or alternative innovative solutions to protect our communities and make them more resilient."

Mr Newman said he'd be fighting in the corner of people who are going to need insurance payouts.

Mr Newman told ABC radio that although the state and local governments had chipped into the statewide flood mitigation scheme, the federal government was yet to come to the table.

He had asked the Commonwealth to contribute $40 million.

"So far we actually haven't had the federal government leaping to their feet to say, `Hey we'll be part of this,'" he said.

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