Multi-million dollar homes unlikely to receive insurance payouts after devastating storm

Owners of Collaroy homes severely damaged during east coast low storms have been left in doubt over insurance payouts and whether they would be able to rebuild if required.

Waves crash against a garden swimming pool that was washed away from a property on the beach front after heavy rain and storms at Collaroy, Sydney. Source: AAP

Many of Sydney's multi-million dollar beachfront homes, thrashed by severe storms during the weekend's east coast low, are unlikely to be insured against the damage, with the future for any that have to be demolished unclear.

Residents of Collaroy, on the city's northern beaches, had parts of their property's destroyed as they were battered by eight-metre waves during a king tide.

Garry Silk, 62, said he was "shattered" when he returned on Monday morning to find 15 metres of his yard claimed by the waves and his in-ground swimming pool lying on the beach.

"We lost our rear fence and then it actually undermined the house," he said.

As of 9am AEST on Tuesday, insurers had received 14,500 claims across Queensland, New South Wales, Victoria and Tasmania, with estimated insured losses of $56 million.

The Acting CEO of The Insurance Council of Australia, Karl Sullivan, said those figures may still rise over coming days.

"While the storm front has moved past Queensland and NSW, heavy rains are still causing damage and flooding in more southern parts of Australia, especially in Tasmania," Mr Sullivan said.

"The industry taskforce established under yesterday’s catastrophe declaration will now begin examining the situation in the newly added states to identify and address any issues or concerns."

Most of the claims received so far concern roof and gutter damage, and damage due to fallen trees.

"The only option at the present time seems to be voluntary acquisition, but it's a very feeble amount of money, not even the land value."

The Insurance Council says policies did not typically cover damage caused by actions of the sea, such as coastal erosion, king tides or storm surges.

Beachfront residents who do not have policies that cover them for the cost of repairs might need to apply for help under state and federal government disaster relief provisions.

It's also unclear whether the properties in Collaroy will be allowed to be rebuilt if they have to be demolished.

The policy of the local Northern Beaches Council is for new buildings to be set back further from the ocean.

Coastal Residents Association secretary Pat Aiken said whether the homes could be rebuilt seemed entirely up to the council and depended on whether they could be built further back on the same block of land.

He said residents who weren't able to rebuild wouldn't be fairly compensated.

"The only option at the present time seems to be voluntary acquisition, but it's a very feeble amount of money, not even the land value," he said.

"It's really just selling under duress, because if they can't rebuild on the land what do they do with it?"

The General Manager of the Council, Mark Ferguson, said it will work closely with emergency services and other parties to remove trees and debris. 

"While safety for residents remains our first priority, we are focused on providing clean up support and services to displaced people and all our affected residents," he said.

"The clean-up is a mammoth task and I would like to thank residents in advance for their continued patience, as this major undertaking and will take some time to complete."

The storm has raised new questions about how beachside residents are able to best protect their homes from storm damage caused by the sea.

Fines of up to $250,000 apply for residents who try to protect their properties with sandbags and there's been a long running dispute over whether the council should build a sea wall or pump sand at Collarory.

Last month, the New South Wales Government announced more than $83 million in funding to help local councils better protect the state's coastlines from natural erosion and minimise the impact of development.

Part of the new coastal management bill is a proposal to increase fines to $1 million for residents who use sandbags.

The government said only public authorities should carry out sandbagging where it is safe to do so, although the council's emergency plan prohibits the SES protecting houses that might fall into the sea.

Researchers who installed cameras and laser technology along coastlines affected by the storm will supply their data to planners to help prevent future damage to properties.

"As we plan into the future, with rising sea levels and changing storm patterns, we need to know where to develop, where not to develop and what will be the impact of future storms on our coastline," said Professor Ian Turner, director of the Water Research Laboratory at the University of New South Wales.

"On the question of whether people should be living around here, those decisions were made 100 years ago. There are houses here now, because 100 years ago planning decisions were made to let them be here. So, we probably need to be thinking more about the future."

The Insurance Council said while the storm was devastating for those directly affected, the overall financial impact remained below the cost of other recent weather events and insurers were well placed to help policy holders.

Last April’s east coast low had insured losses of $950 million and Brisbane 2014 hailstorm losses of $1.4 billion.