INSURANCE companies blame under-investment in flood mitigation by local and state governments for insurance premium hikes.

The Weekly Times understands almost 100,000 Victorian households will see insurance premiums soar - in some cases from $500 to $5000 - in the wake of last summer's natural disasters.

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Nationally, all households face significant rises in premiums as insurers struggle to cope with the cost of re-insurance - the cover companies take out themselves - and weigh up offering insurance to households in high-risk areas, Insurance Council of Australia communications manager, Campbell Fuller said.

"Policy holders in high-risk flood areas may see the recent inclusion of flood cover in their policies and a move towards risk-rating their area reflected in higher premiums," Mr Fuller said.

The RACV has introduced flood cover as standard following an overhaul of its model for assessing at-risk properties, RACV general manager of insurance Paul Northey said.

According to this model - created with information from local government and catchment authorities, data from the company's underwriters and the National Flood Database, held by the ICA - some properties were more exposed to flood than others, due not only to their position but surrounding infrastructure, Mr Northey said.

"RACV ... calls on government to continue to invest in strategies to mitigate the risk of flood, and to ensure government planning and development is in appropriate areas and that homes are not put at risk of being damaged," he said.

Mr Northey said investment in a levee at Swan Hill was a good example of government spending to ease flood risk.

"Because of this, (Swan Hill) is an area where we have been able to mitigate the impact of premium increases," he said.

Mr Fuller said modernising building codes to make "insurability and durability of buildings a priority" and "ensuring land-use planning takes into account the nature of the risks in that location - and controls development accordingly" were critical steps in minimising future flood damage.