Youi expects a large rise to its insurance premiums following the bushfire crisis as Suncorp defends freezing out new customers during the fires.
Insurance is expected to become unaffordable in disaster-prone areas of Australia such as the country's north, an inquiry has heard.
Insurer Youi says its insurance costs will rise by double percentage points this year following Australia's bushfire crisis.
Suncorp has also defended freezing out new customers during the bushfires, saying it would create a "moral hazard".
Youi chief operating officer Bert Bakker told a parliamentary committee he expected insurance to become unaffordable for people in some areas.
"It certainly is possible if the weather patterns become more severe and the flooding becomes more prevalent," Mr Bakker said.
Suncorp agreed, telling the committee that northern Australia faced the highest risk of flood and cyclones.
Chief executive Gary Dransfield said Suncorp had "embargoed" or frozen insurance for new customers in a central Queensland town that faced an "almost certain" flood risk.
Mr Dransfield told the committee it also would have been unfair to existing customers to let new customers sign up during the recent fires.
"We then create moral hazard by enabling people to take out cover when a fire is literally coming over the hill," he said.
"If people know they are able to take out cover as a peril is imminent, that creates the opportunity to not pay premium all year and contribute to a pool."
Three postcodes in Victoria and 20 in NSW were shut out from signing up to insurance during the recent fires.
Mr Bakker said government could help reduce premiums in disaster-prone areas by moving to mitigate risk from events such as flooding.
Insurance Australia Group told the committee it did not insure anything on north Queensland's Hamilton Island.
"It's the underwriting risk: the cyclone risk and the lack of adequate protections to those buildings," chief executive Peter Harmer said.
He said climate change and the places where Australians chose to live would see people avoid taking up insurance due to the cost.
"There are significant sections of the community that are at risk," Mr Harmer said.
"It is our propensity to live within 80 kilometres of the coast and cluster around a handful of major cities."
Youi and IAG will spend an extra $100 million in their own insurance costs next financial year to help meet the risks posed by increasing extreme weather events.