Some home insurers will no longer touch parts of the Gold Coast, leaving residents with unaffordable premiums or without insurance as what experts call the “red-zone” phenomenon expands.

It comes after the Gold Coast experienced a major flooding event earlier this month, with more than 120 millimetres of rain falling in one day. Rainfall records were also smashed earlier this year.

Quote requests lodged with Youi, Budget Direct and other budget insurers were denied for properties in Harris Court, Currumbin Waters, which is in a City of Gold Coast designated flood zone.

Other, larger, insurers offer quotes for policies, but the premiums could be as high as $9000 a year for just the house if storm surge coverage is included.

For policies where storm surge coverage was not immediately clear, the price was between $2500 to $2900.

One resident in the area, who declined to be named, told Domain that Youi declared there was no option to renew their policy when it expired.

Red zones are where home insurance becomes prohibitively expensive due to the high risk of natural disaster, or insurers decline to offer coverage at all.

In parts of Surfers Paradise, the situation is similar. In a flood zone in River Drive, both Youi and Budget Direct did not issue online quotes.

On Rapallo Avenue, Surfers Paradise, on a block partially in the flood zone, Youi will not complete a quote and Budget Direct would quote about $1100 a year but would not include flood cover.

Youi said in a statement the company was “selective about issuing new policies in Currumbin Waters because of the high risk of water inundation, a decision based on both independent flood mapping data and previous claims experience.”

The insurer did not answer the question about whether a Currumbin Waters resident could take out a policy at all, or why others were unable to renew. It did not address Surfers Paradise.

Budget Direct did not respond by deadline.

Climate change consultancy Climate Risk’s director Karl Mallon said the relatively unaffordable insurance rates or unwillingness to insure altogether was troubling.

“They could just turn down the flood cover, but reputationally it just doesn’t look good when a flood comes and people don’t get paid out,” he said. “They say, ‘we just don’t want to know.’

“If they’ve come to that view, what happens if other insurers do? You’re creeping towards uninsurability.”

Insurance premiums of up to $3000 were approaching unaffordability, Dr Mallon said.

“That’s indicating the market rate for flood,” he said. “Last I looked, the median wage in Australia is $60,000, it’s not actually that high.

“That’s 5 per cent of someone’s wage, that’s a lot of money. A few people are starting to baulk at the price.”

Dr Mallon said the $1100 a year figure, quoted by Budget Direct in Rapallo Avene, Surfers Paradise, was still a cause for concern.

“It’s a little bit on the high side but a normal sort of a price,” he said. “[But] when you try to add flood cover, they just won’t do it.”

The $9000 per year quote was provided by NRMA Insurance. A spokesman said in a statement the price was because their data modelling suggested a flood event was likely, but the premium could increase or decrease as new information became available.

“Our customers’ premiums are assessed at their individual property level and reflect their exposure to a range of risks, including flood, as well as other natural disasters,” he said. “NRMA Insurance Home policies automatically provide cover for flood, rainwater run-off and storm surge, which we believe is critical for our customers in coastal areas.”

Dr Mallon said the figure was close to a “real” price for the risk of insuring in these areas, but it amounted to red-zoning.

“If they’re coming in at $9000, that’s exactly a red-zone number for us. We think a lot of people may not be able to afford that,” he said. “There are only really two reasons. One is they genuinely believe that’s the right price they have to charge so they don’t make a loss.

“The only other explanation is they actively don’t want people to take their contract.”

Dr Mallon said he would think twice before buying a property in an area where insurance was that expensive.

If I was a home buyer and I was going into an area like this … this is a pretty big warning sign,” he said. “That’s for this year, that’s not even for the future with climate change.

“Someone buying a house is locking themselves in for 30 years, and the world is changing pretty fast.”

Youi’s statement said there was a need to restrict the construction of new homes in areas at risk of natural disasters, to ensure insurance would remain affordable.

Dr Mallon agreed.

“The big agreement [within the insurance industry] is that buildings are being built where they shouldn’t and with materials, they shouldn’t. It’s not acceptable,” he said.

“The idea we’re allowing the property sector to get away with building high-risk properties is like allowing people to put arsenic in one in 100 tubs of baby formula.”