Long-term customers of the insurer, which was sold by the Giles government for $424m in 2014, say they are outraged at the jump in their premiums, with some along Katherine’s river corridor being asked to pay thousands of dollars per year more for coverage against flooding.

While a rise was expected following the insurer’s move to a pricing methodology based on flood mapping, hydrological modelling and meteorological data, there are suggestions TIO is not calculating “each premium based on the circumstances at each individual address” as it claims.

Chris Rollinson and Vina Hornsby were shocked to find the premium for their Shadforth Road property had increased to $10,100 – a spike of more than 150 per cent.

“I’ve got no idea how they came up with that figure,” an angry Ms Hornsby told the Katherine Times.

The couple has “flood-proofed” the lower storey of their home by installing sloping concrete floors, removing joinery and installing power points that can be isolated during a flood event.

However, it made no difference to how TIO viewed the potential claim risk of the property.

Mr Rollinson said he did not believe the insurer understood what some customers had done to individually mitigate the risk of flood damage.

“It was all designed to take into account that Katherine does flood at times,” he said.

“They have to take that into account.

“Compared to maybe some other houses in Katherine, which might be devastated, all of our house is block, so there’s nothing to rot – all we’ve got to do is hose it out and start again.”​

Another customer, who spoke on the condition of anonymity, said they were stunned to discover the premium for their Riverbank Drive property had risen from $2400 to $10,700.

“It’s a massive rise, not just a little bit,” they said.

“I can’t stay with TIO, it’s just not feasible for me to do.”

The insurer’s chief executive office, Daryl Madden, said that about 25 per cent of customers in Katherine would be looking at a spike of more than $1000 when they went to renew their policies.

However, Mr Tollner said he believed TIO could have waited for flood mitigation infrastructure – as outlined in the Katherine Region Flood Mitigation Advisory Committee’s final report on how to spend the $25m committed by the government to combat flooding in the town – to be built before it introduced the new pricing structure.

“I’m a little bit disappointed that TIO hasn’t given us time to get that [$25m] of flood mitigation stuff in place before they went ahead with the changes,” he said.

“There’s an enormous amount of work to do in relation to flood mapping [around Katherine].”

Whether the infrastructure triggers a drop in premiums when it is finally built remains to be seen, but Mr Madden said waiting was not a viable commercial option for TIO.

“We don’t know when it’s going to happen,” he said.

“It could take five years to get it fixed and we’re a commercial organisation that needs to be able to recover the cost of those risks.”

Member for Katherine Willem Westra van Holthe, who chaired the committee, said the “government will move as quickly as possible to implement the recommendations of the report​”.

“What we certainly are hoping for is that the work outlined in the report, once done, will place some downward pressure for some properties in flood-prone areas of Katherine​,” Mr Westra van Holthe said.

The justification is little consolation to customers like Mr Rollinson and Ms Hornsby, who have abandoned TIO and taken out a policy with another insurer “for about the same price as we were originally paying”.

Speculation is rife that the Northern Territory government could undertake a buyback of Katherine properties deemed “uninsurable”, but Mr Tollner admitted there were currently no plans to do so.

He said he could not provide specifics on such a strategy because there was “no plan in place”.

“I don’t want to raise too much hope,” he explained.

“It’s something that we are considering but everything has to be done on a case-by-case basis.

“We’re floating all sorts of ideas.”

While rezoning of some properties in flood-affected parts of town has been offered as a solution, Mr Tollner said it was possible the government could buy some of them back and “self-insure” to provide housing for public servants.