University of NSW political philosophy professor Jeremy Moss says Australia urgently needs a new model of home insurance because the current model is "not fit for purpose".

One million Australian households are in extreme insurance stress, with those most vulnerable affected by the growing impact of climate disasters.

The market-based model expects all home-owners to bear the risk of loss.

"What we need is a similar approach to making home insurance equitable and affordable that we accept as fundamental to health insurance - in effect a 'Medicare-style' approach to how we structure home insurance options," Prof Moss said on Thursday

It comes after the release of the NSW government's review into devastating floods that hit the Northern Rivers and Hawkesbury-Nepean regions this year.

One of the 28 recommendations in the report is for the insurance industry to improve its guidelines for the construction of new homes, so that homes built after floods can access cheaper insurance.

A central state disaster app could also be used to help with insurance claims, the report recommended.

Australian homes will become increasingly uninsurable due to climate change impacts and natural disasters.

In May the Climate Council estimated that four per cent of homes will be uninsurable by 2030.

Prof Moss says a "Medicare-style'' insurance model would provide a minimum level of coverage regardless of the policyholders' choices and the risk to the property.

Prof Moss and others in the UNSW practical justice initiative proposed a similar insurance model after the 2019-20 bushfires.

He said the insurance issue raised a larger question about future responses to climate change.

"We need to make decisions about how much risk individuals should be asked to bear and whether society should allow widespread 'climate disadvantage'," Prof Moss said.

Australian Associated Press