What happens to uninsured homeowners in Edgecumbe?

Insurance companies are preparing for a surge in home and content claims.

Flooding in Edgecumbe from ex-Cyclone Debbie has today been classified as a medium-scale adverse event by Government.

There are fears that up to one third of homeowners in Edgecumbe are uninsured and could be left badly out of pocket.

IAG head of corporate affairs Craig Dowling said it is hard to determine the total cost of damage caused by the flooding.

"The best estimates, if you look at what happened with the Whanganui floods back in 2015, there were certainly tens of millions of dollars at stake. At the moment in Edgecumbe we know that's where the most damage is currently playing out - we're not even going to be able to get in there until another two or three days," he said.

"Sixteen hundred people have been evacuated and there's certainly several hundred homes involved."

Dowling said flooded homes were the hardest type of damage to assess and determine the value involved to fix them.

At the end of last week, just 400 claims had been lodged, but Dowling said IAG was inspecting more once people returned to their homes.

"For us it's a time to really gear up our processes as to how we're going to respond to people.

"One thing we know, and it's a very unfortunate situation, is that when flooding happens it tends to be in low-lying areas and often these areas are being developed after other areas and it hits communities that are more vulnerable than others," Dowling said.

The insurance sector is accordingly placed to deal with natural disasters, he said.

"Dealing with it from a financial perspective isn't an issue, dealing with it from how to fix the homes and look after it for customers will be a challenge for those people and for us as we gear up for that."

If natural disasters were to become more and more common then insurance premiums would have to be reviewed, he said.