Insurance giant Youi says its own insurance costs will rise by double percentage points this year in the wake of Australia’s bushfire crisis.

Suncorp has also defended freezing out new customers during the bushfire crisis, saying it would create a “moral hazard”.

Youi chief operating officer Bert Bakker told a parliamentary committee he expects insurance to become unaffordable for people in disaster-prone 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 which 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.

Youi’s Mr Bakker said government could help reduce premiums in disaster-prone areas by moving to mitigate risk from things like flooding.