Cost of Melbourne storms nears $500m

The cost of Melbourne's freak storms is quickly heading towards half a billion dollars, one of Australia's largest insurers says.

Allianz says the storm on March 6 was likely to go down as one of the five largest hail storms in Australia in more than 40 years.

"Claims continue to be received from the Melbourne storms and the event is on track to be one of the most damaging hail events in recent memory," Allianz corporate affairs general manager Nicholas Scofield said on Tuesday.

"One week on, total insurance industry claims costs are heading quickly towards the half a billion dollar mark, which would make the March 2010 Melbourne event one of the largest storms in decades and the largest hail event since the massive Sydney hail storm of April 1999."

That storm was the most expensive weather event for Australian insurers, with $1.7 billion in claims made.

Melbourne's storm saw large hail stones damage cars and houses in a one-hour burst, and turn city streets into rivers.

Part of the roof of the Southern Cross railway station and the nearby Etihad Stadium collapsed under the huge weight of water that fell in the downpour.

Allianz has so far received over 8,300 claims valued at around $58 million from its Melbourne policy holders.

All holders of Allianz home and motor insurance policies are covered for damage by hail, rainwater and flash flooding due to rainwater run-off, Mr Scofield said.

Australia's largest general insurer, Suncorp-Metway Ltd, said on Monday it had received about 35,000 claims as a result of the storm, with a maximum financial exposure of $200 million, after reinsurance cover.

The operator of AAMI, GIO and Apia said the claims were predominantly for damaged cars and homes, with a smaller number of commercial claims.

Suncorp shares gained six cents on Tuesday to $8.63, while the country's second largest general insurer IAG gained three cents to $3.99.