Shellharbour Mayor Marianne Saliba has asked NRMA Insurance to show the council what information it is using to justify huge premium increases in the region.
Insurance companies often use council flood studies as part of their approach to calculating premiums but Cr Saliba said Shellharbour City Council had not changed its flood data in the past six years.
"They've had nothing from us since 2006," she said.
"In fact our council officers have rung the NRMA and asked them to provide the information that they claim to be using and they haven't been able to provide anything."
She said there were flood studies under way, in response to the flooding that took place in the Shellharbour area in 2011 but nothing had been finalised.
Cr Saliba said NRMA couldn't justify the increases, which are as much as 800 per cent in some cases, and added that she felt the insurer was hitting the region hard in an attempt to recoup losses.
"I'm bitterly disappointed that insurance companies, particularly the NRMA, take millions and millions of dollars every year from their policyholders and when they have to pay something back, the first thing they do is make everyone else pay for it," she said.
"They make millions in profits and the slightest variation in their profits, they call it a loss and we pay for it."
She was worried that people being hit included some who had never made a claim nor had any flooding in their homes.
"What the NRMA are doing is forcing people to make the decision not to insure," she said.
"When we get to the stage where no-one's insured, we're going to have real problems. They're forcing people right out of the business."
Cr Saliba said the council flood studies were an important part of planning the region's future.
She said her own house was being built in line with the results of one such study.
"I'm building a house down in Osborne Parade," she said. "Some of the other houses in my street are on slabs. My house had to be raised 3.6 metres because of previous studies that have been done.
"There's a creek two streets away and, because of that, my house had to be raised. So in doing that [flood studies], what we find is that we can make sound decisions to protect people for the future.
"You can't do it in hindsight."
An NRMA Insurance spokesman said the company had not received a request for information from Shellharbour City Council.
"We have not been approached by Shellharbour council in regard to the increases some customers have seen as a result of our assessment of their stormwater run-off risk," the spokesman said.
"To calculate our customers' premiums we take into account a range of factors. While we do often use council data in our assessment, we overlay it with a range of other data, including specialist mapping and hydrology reports, watercourse mapping and insurance information."
The spokesman said that NRMA Insurance would not be sharing its information with anyone.
"To develop a complete picture of a customer's risk to a range of events, we use various data sources," he said.
"Because of the complexity of the data and the models we use, we do not share it with external parties.
"As we have said to the Illawarra Mercury previously, if a customer believes they have data that is more comprehensive or detailed than ours, they should contact us on 132 132 and we will review our assessment of their property."