The Insurance Council of Australia has declared major flooding around Forbes in central NSW a catastrophe with damage expected to cost insurers tens of millions of dollars.
ICA chief executive Rob Whelan said the industry body's preliminary assessment indicated the bill will be high.
"Early reports indicate the region has suffered extensive crop losses, while about 100 businesses and homes may also have been affected by flooding," he said.
"Several insurers have already begun setting up disaster response teams in the Forbes region to assist their policyholders."
Hundreds of Forbes residents were evacuated on Sunday and it is not yet known when they will be able to return to their homes. The SES has received about 2,900 calls for help since the rain began on August 30.
The weather bureau has forecast more rain will hit Forbes from Wednesday through to Friday, while a second, higher peak in the Lachlan River is expected next week near Condobolin and Euabalong.
On Monday, Premier Mike Baird announced that former NSW Police Deputy Commissioner Dave Owens will lead the clean-up and recovery effort for the region.
Mr Whelan said the catastrophe declaration allows insurers access to the industry's disaster response resources, which include a taskforce to address any issues, a disaster hotline, and the mobilisation of ICA staff to work directly with local services and affected policyholders.
He said the insurance losses would likely be in "the tens of millions of dollars", although the full extent of losses will not be known for several weeks.
Insurers earlier this year received tens of thousands of claims following severe east coast storms in June.
Insurance companies, including IAG and Suncorp, received more than 32,000 claims across Queensland, NSW, Victoria and Tasmania at the time, with the costs estimated at more than $235 million.
