Four months after flood waters devastated Bundaberg’s Liberty Villas retirement village, a $1.2m insurance claim has been rejected.

This leaves the vast majority of ILU’s, 106 of 124, in need of repair while stranded residents are forced to remain with family and friends.

The claim from Kinsmen Securities which owns Liberty Villas was reviewed on a "contentious panel" due to the level of the claim said David Grabau, a spokesman for CGU.

"We determined that the cause of the event or damage was flood and the property did not have flood cover, so the claim was denied," he said.

"We treated this with enormous sensitivity but in the end the owner did not have flood cover."

Management at Liberty Villas were surprised by the news.

"We thought we were covered [for flood damage] but obviously we weren't," said manager Darren Ey.