QUEENSLAND flood victims should not expect any special favours from insurance companies if their homes are not insured against floods.

The Insurance Council of Australia has warned that insurance companies would pay out on claims according to the terms and conditions of policies.

"If people do not purchase flood cover insurance, they will not be covered," an ICA spokesman said yesterday.

It is estimated more than half of all insured homes in Queensland are not covered for flood damage.   :(

The Australian Securities and Investments Commission estimated that 70 per cent of all Australian homes were under-insured in 2005.  :(

"More than 50 per cent of all available insurance policies in Queensland provide flood cover," the ICA spokesman said.

"People should assess their needs and get the proper insurance coverage for their homes and not be guided by price only."



Suncorp, the biggest insurer in Queensland, is the only company to automatically protect against flooding for home and contents insurance policyholders.

There are three types of flood insurance coverage: flash flooding, storm damage and riverine flooding.  :-?

IAG, Allianz and QBE do not offer flood protection. RACQ provides flood and riverine cover as an optional extra.

An industry source said some companies were not prepared to offer flood protection in areas that had been subject to floods in the past.

"I would be surprised if insurance companies would make ex-gratia payments to customers who do not have flood insurance," a spokesman for Allianz said.

"The scale of the Queensland disaster is so large that it would be financially prohibitive."

However, flood victims whose homes have been wrecked by the floods and who have no insurance can turn to the state government for assistance.

"We will be helping people without flood or home insurance, but it is far too early to know the details, and the priority right now is dealing with the ongoing emergency situation," a government spokesman from the Queensland Premier's office said.

Premier Anna Bligh has set up a flood assistance program, and announced concessional loans for primary producers and small businesses to help in the flood recovery and clean-up.

In addition, the Premier's Flood Relief has raised $35.8m to help families in need.

Suncorp received an additional 1000 claims from flood victims in Toowoomba, Ipswich and Brisbane yesterday, taking the total claims lodged so far to 5000.

IAG has received 2400 claims from the same area but said it was too early to calculate the total claim cost to the insurer. This is in addition to the 1200 claims it received from earlier floods caused by Cyclone Tasha, which is expected to cost IAG between $10m and $30m. IAG operates under the NRMA and CGU insurance brands in Queensland.

RACQ received 400 fresh claims yesterday, taking its total to 2000. QBE declined to comment.


Comments on this story

   *
     LaurieOfCoburg Posted at 2:06 AM Today

         Why would you expect insurance companies to bend the rules or have a heart. How are you supposed to get cover for flood when most of the companies won't offer it unless you live on top of Mount Everest. One of the main reasons l left the insurance industry, they are quick to take your money but will always find an excuse not to pay out.   :(

   *
     michelle of melb Posted at 1:54 AM Today

         If you're stupid enough not to have your house insured, why should you expect to be compensated. Those who do the responsible thing and do insure themselves should be taken care of first, not the freeloaders who sit back and expect someone else to bail them out all the time. Sorry - NO SYMPATHY.

   *
     Wendy of Rural Victoria Posted at 1:34 AM Today

         It's a bit rich when insurance companies refuse to cover you for flood.

There are three types of flood insurance coverage.  I see, now they tell us.   :(

As per usual sook, you are barking up the wrong knee. The issue isn`t 'flood insurance", the issue is the fact that even with "flood insurance", in the event of a large scale flood, insurance companies simply aren`t big enough to pay out, hence the "act of god" clause.

I always thought if you had insurance you would be covered,  silly me guess I thought wrong.   :(  

Thanks crook.

Please include a link to the source when you post articles.

Most welcome.  Try Herald/Sun newspaper.   :)  

http://www.heraldsun.com.au/news/special-reports/no-insurance-no-payout/story-fn7kabp3-1225987475477

wrote on Jan 14^th, 2011 at 6:33am:

I always thought if you had insurance you would be covered,  silly me guess I thought wrong.   :(

Insurance companies are briliant at grabbing the premiums, but where they really excell is in the area of payment avoidance.

Firstly, they can play ducks and drakes with the different "categories" of water damage.

Secondly, and more importantly, flood insurance at best is a very unreliable product.  The simple fact is that in these big flood events, the insurance companies simply haven`t enough funding capacity to pay, so they have an "out clause", which deletes tha insurance companies` responsibilities. Ron Boswell is innitiating talks to address this problem.  Boswell is suggesting that the flood component of all insurance premiums be directed to central fund, in an attempt to eliminate this fault in the system.

Thirdly, I blame the insurance companies for not explaining this to their potential clients. Although, the "act of god" clause is actually common sense, people should be made aware of the default capacity of their policies. Flood Insurance - pays out SOMETIMES!

"Boswell is suggesting that the flood component of all insurance premiums be directed to central fund, in an attempt to eliminate this fault in the system"

Is this a new thing? That wasn't what he was suggesting the other day - he was proposing to add a levy to ALL insurance policies, to build a fund for natural disasters.

Do you even understand your hero's proposal?

wrote on Jan 14^th, 2011 at 6:26am:

There are three types of flood insurance coverage.  I see, now they tell us.   :(

Actually it's in the Product Disclosure Statement of any insurance policy, by law in fact.

wrote on Jan 14^th, 2011 at 6:33am:

I always thought if you had insurance you would be covered,  silly me guess I thought wrong.   :(

That bit surprises me.

wrote on Jan 14^th, 2011 at 6:26am:

There are three types of flood insurance coverage.  I see, now they tell us.   :(

Can I suggest, there are only two -
1) Your covered!
2) Your NOT covered?

The trick is, as usual, to LOOK BEFORE YOU BUY!

aussiefree2ride wrote on Jan 14^th, 2011 at 6:29am:

As per usual sook, you are barking up the wrong knee. The issue isn`t 'flood insurance", the issue is the fact that even with "flood insurance", in the event of a large scale flood, insurance companies simply aren`t big enough to pay out, hence the "act of god" clause.

Insurance policies (in Australia) list things that are covered and things that are NOT covered.

I don't recall seeing under the NOT covered list, an exclusion saying Act of God!

For want of a better term, there are "Acts of God" that are covered and there are "Acts of God" that are Not covered.

There are also "Non-Acts of God" things that are covered and "Non-Acts of God" things, which are Not covered.

To all, I strongly suggest, you read the policy, before you buy it and you ensure that the major covers you are likely to need, are covered.

If not, then look around!

That said, it may be likely that some covers, will start to become difficult get, at any price!

perceptions_now wrote on Jan 14^th, 2011 at 12:37pm:

aussiefree2ride wrote on Jan 14th, 2011 at 6:29am: As per usual sook, you are barking up the wrong knee. The issue isn`t 'flood insurance", the issue is the fact that even with "flood insurance", in the event of a large scale flood, insurance companies simply aren`t big enough to pay out, hence the "act of god" clause. Insurance policies (in Australia) list things that are covered and things that are NOT covered. I don't recall seeing under the NOT covered list, an exclusion saying Act of God! For want of a better term, there are "Acts of God" that are covered and there are "Acts of God" that are Not covered. There are also "Non-Acts of God" things that are covered and "Non-Acts of God" things, which are Not covered. To all, I strongly suggest, you read the policy, before you buy it and you ensure that the major covers you are likely to need, are covered. If not, then look around! That said, it may be likely that some covers, will start to become difficult get, at any price!

You are totally clueless.

Please delete wrote on Jan 14^th, 2011 at 8:31am:

"Boswell is suggesting that the flood component of all insurance premiums be directed to central fund, in an attempt to eliminate this fault in the system" Is this a new thing? That wasn't what he was suggesting the other day - he was proposing to add a levy to ALL insurance policies, to build a fund for natural disasters. Do you even understand your hero's proposal?

Keep working on it, you might get there one day, sorry, can`t wait for you.

qikvtec wrote on Jan 14^th, 2011 at 8:55am:

wrote on Jan 14th, 2011 at 6:26am: There are three types of flood insurance coverage.  I see, now they tell us.   :( Actually it's in the Product Disclosure Statement of any insurance policy, by law in fact.

There is also a needle in the second last haystack, if you happen to be highly trained in looking for needles, and have the time to look, you should find it.  One thing I`m trying to get across is that the insurance representative should be required by law to SPECIFICALLY and CLEARLY state the limitations of each flood insurance product.  Too many people who thought they were covered, aren`t.

aussiefree2ride wrote on Jan 14^th, 2011 at 1:12pm:

perceptions_now wrote on Jan 14th, 2011 at 12:37pm: aussiefree2ride wrote on Jan 14th, 2011 at 6:29am: As per usual sook, you are barking up the wrong knee. The issue isn`t 'flood insurance", the issue is the fact that even with "flood insurance", in the event of a large scale flood, insurance companies simply aren`t big enough to pay out, hence the "act of god" clause. Insurance policies (in Australia) list things that are covered and things that are NOT covered. I don't recall seeing under the NOT covered list, an exclusion saying Act of God! For want of a better term, there are "Acts of God" that are covered and there are "Acts of God" that are Not covered. There are also "Non-Acts of God" things that are covered and "Non-Acts of God" things, which are Not covered. To all, I strongly suggest, you read the policy, before you buy it and you ensure that the major covers you are likely to need, are covered. If not, then look around! That said, it may be likely that some covers, will start to become difficult get, at any price! You are totally clueless.

Really, why?

Specifically, where am I incorrect?

aussiefree2ride wrote on Jan 14^th, 2011 at 1:14pm:

Please delete wrote on Jan 14th, 2011 at 8:31am: "Boswell is suggesting that the flood component of all insurance premiums be directed to central fund, in an attempt to eliminate this fault in the system" Is this a new thing? That wasn't what he was suggesting the other day - he was proposing to add a levy to ALL insurance policies, to build a fund for natural disasters. Do you even understand your hero's proposal? Keep working on it, you might get there one day, sorry, can`t wait for you.

http://www.theaustralian.com.au/national-affairs/nationals-senator-ron-boswell-proposes-insurance-pool-for-flood-disasters/story-fn59niix-1225982331135

"QUEENSLAND Nationals senator Ron Boswell has proposed a national insurance pool to cover flood disasters.
Senator Boswell's proposal, which he hopes to raise with Tony Abbott, is centred on a small impost that would be linked to household insurance policies and collected by government.

The funds would be funnelled into a national pool."

"....is centred on a small impost...."

You were saying, af2r???

Lobo wrote on Jan 14^th, 2011 at 1:58pm:

aussiefree2ride wrote on Jan 14th, 2011 at 1:14pm: Please delete wrote on Jan 14th, 2011 at 8:31am: "Boswell is suggesting that the flood component of all insurance premiums be directed to central fund, in an attempt to eliminate this fault in the system" Is this a new thing? That wasn't what he was suggesting the other day - he was proposing to add a levy to ALL insurance policies, to build a fund for natural disasters. Do you even understand your hero's proposal? Keep working on it, you might get there one day, sorry, can`t wait for you. http://www.theaustralian.com.au/national-affairs/nationals-senator-ron-boswell-proposes-insurance-pool-for-flood-disasters/story-fn59niix-1225982331135 "QUEENSLAND Nationals senator Ron Boswell has proposed a national insurance pool to cover flood disasters. Senator Boswell's proposal, which he hopes to raise with Tony Abbott, is centred on a small impost that would be linked to household insurance policies and collected by government. The funds would be funnelled into a national pool." You were saying, af2r???

That`s the one, it has some merit & is worth discussing.  As flood insurance presently stands, each insurance company has an "out" clause, "act of God" clause which effectively lets them off the hook re disaster claims, this obviously isn`t fair, and it`s not the best option by a long shot.

aussiefree2ride wrote on Jan 14^th, 2011 at 2:03pm:

Lobo wrote on Jan 14th, 2011 at 1:58pm: aussiefree2ride wrote on Jan 14th, 2011 at 1:14pm: Please delete wrote on Jan 14th, 2011 at 8:31am: "Boswell is suggesting that the flood component of all insurance premiums be directed to central fund, in an attempt to eliminate this fault in the system" Is this a new thing? That wasn't what he was suggesting the other day - he was proposing to add a levy to ALL insurance policies, to build a fund for natural disasters. Do you even understand your hero's proposal? Keep working on it, you might get there one day, sorry, can`t wait for you. http://www.theaustralian.com.au/national-affairs/nationals-senator-ron-boswell-proposes-insurance-pool-for-flood-disasters/story-fn59niix-1225982331135 "QUEENSLAND Nationals senator Ron Boswell has proposed a national insurance pool to cover flood disasters. Senator Boswell's proposal, which he hopes to raise with Tony Abbott, is centred on a small impost that would be linked to household insurance policies and collected by government. The funds would be funnelled into a national pool." You were saying, af2r??? That`s the one, it has some merit & is worth discussing.  As flood insurance presently stands, each insurance company has an "out" clause, "act of God" clause which effectively lets them off the hook re disaster claims, this obviously isn`t fair, and it`s not the best option by a long shot.

That is incorrect!

Also, I would not be in favour of Australian Insurers being forced into a National Flood cover, thus forcing all premiums dramatically higher, no matter where you live or where your business may be!

I would also be against, the states &/or the Federal government being forced into a national Flood pool, as that would mean increased costs for all consumers.

I would be in favour of a re-examination of where housing & businesses may be allowed to build &/or re-build, to shift away from Flood prone areas!

perceptions_now wrote on Jan 14^th, 2011 at 2:32pm:

aussiefree2ride wrote on Jan 14th, 2011 at 2:03pm: Lobo wrote on Jan 14th, 2011 at 1:58pm: aussiefree2ride wrote on Jan 14th, 2011 at 1:14pm: Please delete wrote on Jan 14th, 2011 at 8:31am: "Boswell is suggesting that the flood component of all insurance premiums be directed to central fund, in an attempt to eliminate this fault in the system" Is this a new thing? That wasn't what he was suggesting the other day - he was proposing to add a levy to ALL insurance policies, to build a fund for natural disasters. Do you even understand your hero's proposal? Keep working on it, you might get there one day, sorry, can`t wait for you. http://www.theaustralian.com.au/national-affairs/nationals-senator-ron-boswell-proposes-insurance-pool-for-flood-disasters/story-fn59niix-1225982331135 "QUEENSLAND Nationals senator Ron Boswell has proposed a national insurance pool to cover flood disasters. Senator Boswell's proposal, which he hopes to raise with Tony Abbott, is centred on a small impost that would be linked to household insurance policies and collected by government. The funds would be funnelled into a national pool." You were saying, af2r??? That`s the one, it has some merit & is worth discussing.  As flood insurance presently stands, each insurance company has an "out" clause, "act of God" clause which effectively lets them off the hook re disaster claims, this obviously isn`t fair, and it`s not the best option by a long shot. That is incorrect! Also, I would not be in favour of Australian Insurers being forced into a National Flood cover, thus forcing all premiums dramatically higher, no matter where you live or where your business may be! I would also be against, the states &/or the Federal government being forced into a national Flood pool, as that would mean increased costs for all consumers. I would be in favour of a re-examination of where housing & businesses may be allowed to build &/or re-build, to shift away from Flood prone areas!

Do you prefer the present weak, unreliable system?  ;D ;D

aussiefree2ride wrote on Jan 14^th, 2011 at 2:48pm:

perceptions_now wrote on Jan 14th, 2011 at 2:32pm: aussiefree2ride wrote on Jan 14th, 2011 at 2:03pm: Lobo wrote on Jan 14th, 2011 at 1:58pm: aussiefree2ride wrote on Jan 14th, 2011 at 1:14pm: Please delete wrote on Jan 14th, 2011 at 8:31am: "Boswell is suggesting that the flood component of all insurance premiums be directed to central fund, in an attempt to eliminate this fault in the system" Is this a new thing? That wasn't what he was suggesting the other day - he was proposing to add a levy to ALL insurance policies, to build a fund for natural disasters. Do you even understand your hero's proposal? Keep working on it, you might get there one day, sorry, can`t wait for you. http://www.theaustralian.com.au/national-affairs/nationals-senator-ron-boswell-proposes-insurance-pool-for-flood-disasters/story-fn59niix-1225982331135 "QUEENSLAND Nationals senator Ron Boswell has proposed a national insurance pool to cover flood disasters. Senator Boswell's proposal, which he hopes to raise with Tony Abbott, is centred on a small impost that would be linked to household insurance policies and collected by government. The funds would be funnelled into a national pool." You were saying, af2r??? That`s the one, it has some merit & is worth discussing.  As flood insurance presently stands, each insurance company has an "out" clause, "act of God" clause which effectively lets them off the hook re disaster claims, this obviously isn`t fair, and it`s not the best option by a long shot. That is incorrect! Also, I would not be in favour of Australian Insurers being forced into a National Flood cover, thus forcing all premiums dramatically higher, no matter where you live or where your business may be! I would also be against, the states &/or the Federal government being forced into a national Flood pool, as that would mean increased costs for all consumers. I would be in favour of a re-examination of where housing & businesses may be allowed to build &/or re-build, to shift away from Flood prone areas!   Do you prefer the present weak, unreliable system?  ;D ;D

NO, I would prefer what I recommended!

perceptions_now wrote on Jan 14^th, 2011 at 2:52pm:

aussiefree2ride wrote on Jan 14th, 2011 at 2:48pm: perceptions_now wrote on Jan 14th, 2011 at 2:32pm: aussiefree2ride wrote on Jan 14th, 2011 at 2:03pm: Lobo wrote on Jan 14th, 2011 at 1:58pm: aussiefree2ride wrote on Jan 14th, 2011 at 1:14pm: Please delete wrote on Jan 14th, 2011 at 8:31am: "Boswell is suggesting that the flood component of all insurance premiums be directed to central fund, in an attempt to eliminate this fault in the system" Is this a new thing? That wasn't what he was suggesting the other day - he was proposing to add a levy to ALL insurance policies, to build a fund for natural disasters. Do you even understand your hero's proposal? Keep working on it, you might get there one day, sorry, can`t wait for you. http://www.theaustralian.com.au/national-affairs/nationals-senator-ron-boswell-proposes-insurance-pool-for-flood-disasters/story-fn59niix-1225982331135 "QUEENSLAND Nationals senator Ron Boswell has proposed a national insurance pool to cover flood disasters. Senator Boswell's proposal, which he hopes to raise with Tony Abbott, is centred on a small impost that would be linked to household insurance policies and collected by government. The funds would be funnelled into a national pool." You were saying, af2r??? That`s the one, it has some merit & is worth discussing.  As flood insurance presently stands, each insurance company has an "out" clause, "act of God" clause which effectively lets them off the hook re disaster claims, this obviously isn`t fair, and it`s not the best option by a long shot. That is incorrect! Also, I would not be in favour of Australian Insurers being forced into a National Flood cover, thus forcing all premiums dramatically higher, no matter where you live or where your business may be! I would also be against, the states &/or the Federal government being forced into a national Flood pool, as that would mean increased costs for all consumers. I would be in favour of a re-examination of where housing & businesses may be allowed to build &/or re-build, to shift away from Flood prone areas!   Do you prefer the present weak, unreliable system?  ;D ;D NO, I would prefer what I recommended!

If all you are talking about is "I would be in favour of a re-examination of where housing & businesses may be allowed to build &/or re-build, to shift away from Flood prone areas!"

My question to you is, considering the area of this recent Queensland flood is larger than the entire State of NSW, or bigger than France & Germany combined.  You obviously can`t realistically expect your "plan" to work?

If the suggestion is to force all insurerees to get flood insurance regardless of where they live, then I would be against it, as it would force those who make a wise choice of house location to subsidise those who make a poor choice, and remove the disincentive to invest in flood prone properties.

aussiefree2ride wrote on Jan 14^th, 2011 at 7:15pm:

My question to you is, considering the area of this recent Queensland flood is larger than the entire State of NSW, or bigger than France & Germany combined.  You obviously can`t realistically expect your "plan" to work?

With respect, vast tracts of that is uninhabited and frequently uninhabitable.

There should be consideration to perhaps not reoccupying some of the areas, but even that isn't really feasible given the scale of the task.  

Also, I would not be in favour of Australian Insurers being forced into a National Flood cover, thus forcing all premiums dramatically higher, no matter where you live or where your business may be!

I would also be against, the states &/or the Federal government being forced into a national Flood pool, as that would mean increased costs for all consumers.

I would be in favour of a re-examination of where housing & businesses may be allowed to build &/or re-build, to shift away from Flood prone areas![/quote]


what, no graph. You disappoint me dopey.

qikvtec wrote on Jan 14^th, 2011 at 9:21pm:

aussiefree2ride wrote on Jan 14th, 2011 at 7:15pm: My question to you is, considering the area of this recent Queensland flood is larger than the entire State of NSW, or bigger than France & Germany combined.  You obviously can`t realistically expect your "plan" to work? With respect, vast tracts of that is uninhabited and frequently uninhabitable. There should be consideration to perhaps not reoccupying some of the areas, but even that isn't really feasible given the scale of the task.

Agreed, but the point I was making is that for the State to function, there has to be some exposure to flood risk.  I`m also in agreement that, although we have a 100 year rule for flood zoning, there has, in recent years been too much built in lower areas.

Your point re  reoccupying flood prone areas is on the money also, this is sure to be part of the new equation.

The reports of dog acts by insurance companies are starting to flow in...

How can insurance assessors insist on proof of ownership and other evidence from people who have had all (or much) of their paperwork, photos and possessions inundated and/or washed away by freak flood events...!?

I, for one, hope that someone establishes a public name and shame site/page in the industry's dishonour...


PS I thought it was best to tack this post onto an existing thread, rather than start a new one which is likely to overlap considerably.

Equitist wrote on Jan 19^th, 2011 at 7:20pm:

The reports of dog acts by insurance companies are starting to flow in... How can insurance assessors insist on proof of ownership and other evidence from people who have had all (or much) of their paperwork, photos and possessions inundated and/or washed away by freak flood events...!? I, for one, hope that someone establishes a public name and shame site/page in the industry's dishonour... PS I thought it was best to tack this post onto an existing thread, rather than start a new one which is likely to overlap considerably.

With respect Thy,  I would hope an insurance company insisted on proof of identity and ownership before they sent a payment for my total loss, imagine you lost your home whilst you were away on an extended holiday only to come back to find some scammer has cashed in on your insurance policy.

qikvtec wrote on Jan 19^th, 2011 at 7:28pm:

Equitist wrote on Jan 19th, 2011 at 7:20pm: The reports of dog acts by insurance companies are starting to flow in... How can insurance assessors insist on proof of ownership and other evidence from people who have had all (or much) of their paperwork, photos and possessions inundated and/or washed away by freak flood events...!? I, for one, hope that someone establishes a public name and shame site/page in the industry's dishonour... PS I thought it was best to tack this post onto an existing thread, rather than start a new one which is likely to overlap considerably. With respect Thy,  I would hope an insurance company insisted on proof of identity and ownership before they sent a payment for my total loss, imagine you lost your home whilst you were away on an extended holiday only to come back to find some scammer has cashed in on your insurance policy.

Fair enough - but that's not really what I was getting at...

From the news reports, it is clear that many people will be unable provide evidence of purchase/ownership of some or most of the contents of their homes...

Some have had much of their home contents literally washed away...and have no idea where same ended up...

Others will have been affected by looting - with no means of proving one way or another (regardless of whether they will be hit with 2 excesses for more than one loss event)...

No doubt, many who have suffered inundation up to the waist or ceiling (and therefore a near-total loss of household contents) will be hit by the insurance industry's ultimate trump card - the 'averaging clause'...

Then there's those people who had an excess for flood coverage showing on the front page of their insurance schedule, only to find that buried in the detail is a pissy flood claim limit on contents...

Of course, such clauses will only apply to the minority who were actually covered for "flood" (in one or more of the 3 possible forms) in the first instance...

Equitist wrote on Jan 19^th, 2011 at 7:48pm:

qikvtec wrote on Jan 19th, 2011 at 7:28pm: Equitist wrote on Jan 19th, 2011 at 7:20pm: The reports of dog acts by insurance companies are starting to flow in... How can insurance assessors insist on proof of ownership and other evidence from people who have had all (or much) of their paperwork, photos and possessions inundated and/or washed away by freak flood events...!? I, for one, hope that someone establishes a public name and shame site/page in the industry's dishonour... PS I thought it was best to tack this post onto an existing thread, rather than start a new one which is likely to overlap considerably. With respect Thy,  I would hope an insurance company insisted on proof of identity and ownership before they sent a payment for my total loss, imagine you lost your home whilst you were away on an extended holiday only to come back to find some scammer has cashed in on your insurance policy. Fair enough - but that's not exactly what I was getting at... From the news reports, it is clear that many people will be unable provide evidence of purchase/ownership of some or most of the contents of their homes... Some have had much of their home contents literally washed away...and have no idea where same ended up... Others will have been affected by looting - with no means of proving one way or another (regardless of whether they will be hit with 2 excesses for more than one loss event)... No doubt, many who have suffered inundation up to the waist or ceiling (and therefore a near-total loss of household contents) will be hit by the insurance industry's ultimate trump card - the 'averaging clause'... Then there's those people who had an excess for flood coverage showing on the front page of their insurance schedule, only to find that buried in the detail is a pissy flood claim limit on contents... Of course, such clauses will only apply to the minority who were actually covered for "flood" (in one or more of the 3 possible forms) in the first instance...

Given the rampant under insurance in this country, it wouldn't be hard to justify possession of basic household items that would eclipse the sum insured.  If you get a hard time from your insurer and don't like the outcome ask them for the contact details for their external dispute resolution provider and tell them immediately you aren't happy with the outcome and you want to lodge a complaint via both their internal and EDR process.

Insurance is a case of buyer beware, if you don't know what you are doing seek advice from someone who does.  

Personally I don't agree with the position that you thought you were insured and should therefore have all of your possessions replaced.  

I'd support you 100% if you had a legitimate claim, but it is a black and white issue.  

As for the piddly fine print a general insurance product must have a plain english pds. In the event you don't wish to or can't  decipher the damn thing, simply ask what is and isn't covered.  

Insurance comes at a cost, if you want basic coverage you will get relatively generous limits, however if you want extended cover or cover on particular items ask for it.

Some people may find out the hard way about under-insurance and the potential pay-out adjustment that can occur.

As it happens, Qiky, I have experience as both a commercial underwriter and claims clerk and consumer claimant...

I've dealt with a number of bizarre claims - and made two of my own...

Within about 6 months, we had 2 claims on separate rental properties insured, inclusive of Landlord Protection cover, through the same Insurer: one being due to an act of human negligence/ignorance by a neighbour, the other a freak storm event...

I should point out that I was pleasantly-surprised by the manner in which the Insurer (Commonwealth Insurance) handled both claims...

As regards the current handling of the flood event/s, the magnitude of the aggregated losses will doubtless create temptation for Insurers to unconscionably-squeeze vulnerable policyholders to unfair limits - hence the name and shame angle...

qikvtec wrote on Jan 19^th, 2011 at 7:59pm:

If you get a hard time from your insurer and don't like the outcome ask them for the contact details for their external dispute resolution provider and tell them immediately you aren't happy with the outcome and you want to lodge a complaint via both their internal and EDR process.

That is good advice - it is the best way to hold them to account.



Quote:

In the event you don't wish to or can't  decipher the damn thing, simply ask what is and isn't covered.

Good in theory but difficult in practice - since it is difficult to imagine the full range of potential losses that may occur (even harder to match them to a policy definition).



Quote:

Some people may find out the hard way about under-insurance and the potential pay-out adjustment that can occur.

This is one of the most difficult and potentially-heartbreaking aspects of household insurance - hence I personally lean more towards over-insurance...

Equitist wrote on Jan 19^th, 2011 at 8:25pm:

qikvtec wrote on Jan 19th, 2011 at 7:59pm:  If you get a hard time from your insurer and don't like the outcome ask them for the contact details for their external dispute resolution provider and tell them immediately you aren't happy with the outcome and you want to lodge a complaint via both their internal and EDR process. That is good advice - it is the best way to hold them to account. Quote: In the event you don't wish to or can't  decipher the damn thing, simply ask what is and isn't covered.   Good in theory but difficult in practice - since it is difficult to imagine the full range of potential losses that may occur (even harder to match them to a policy definition). [quote] Some people may find out the hard way about under-insurance and the potential pay-out adjustment that can occur.

This is one of the most difficult and potentially-heartbreaking aspects of household insurance - hence I personally lean more towards over-insurance...
[/quote]

If you purchased a house in a flood prone area, or even one near enough a waterway, would it not be prudent to ensure you were adequately covered for an almost certain event?

The biggest issue is that most are prepared to take the cheapest policy rather than one that represents good value the opportunity cost of which is under insurance.

qikvtec wrote on Jan 19^th, 2011 at 8:41pm:

Equitist wrote on Jan 19th, 2011 at 8:25pm: qikvtec wrote on Jan 19th, 2011 at 7:59pm:  If you get a hard time from your insurer and don't like the outcome ask them for the contact details for their external dispute resolution provider and tell them immediately you aren't happy with the outcome and you want to lodge a complaint via both their internal and EDR process. That is good advice - it is the best way to hold them to account. Quote: In the event you don't wish to or can't  decipher the damn thing, simply ask what is and isn't covered.   Good in theory but difficult in practice - since it is difficult to imagine the full range of potential losses that may occur (even harder to match them to a policy definition). [quote] Some people may find out the hard way about under-insurance and the potential pay-out adjustment that can occur. This is one of the most difficult and potentially-heartbreaking aspects of household insurance - hence I personally lean more towards over-insurance...

If you purchased a house in a flood prone area, or even one near enough a waterway, would it not be prudent to ensure you were adequately covered for an almost certain event?

The biggest issue is that most are prepared to take the cheapest policy rather than one that represents good value the opportunity cost of which is under insurance.[/quote]

The problem with the under-insurance on contents, is that many people seem to think that they will be able to make a claim for the full sum insured (in the event of a total loss) and either refurnish more sparsely and/or with lower quality goods...

If someone has insured their home contents for (say) $20,000 but their contents are retrospectively-assessed at a replacement value of $40,000 after they have suffered (say) a 50% loss, they might be surprised that the insurer will only offer to pay out $10,000 (if they're lucky)...

After all, they have effectively suffered a loss of only 1/2 of the 1/2 of the contents that they had insured...

Following on from my previous post, here's a worked example from a randomly-chosen Insurance web-site: -

http://www.fitzpatrick.com.au/infopages/property-infoE.html


Quote:

Under Insurance - The Average Clause and How it Works Some policies contain what is known as an Average or Co-Insurance clause. The unusual impact of these types of clauses is that if you underinsure i.e. Not insure to the full value or the amount of insurance limit purchased is inadequate, your claim may be reduced in proportion to the amount of the under-insurance. For example: Full Replacement Value of Building      $1,000,000 Sum Insured under the policy                 $500,000 Therefore you would be self insured for 50% of the full value       Amount of claim, say                               $100,000 Amount payable by Insurers                   $50,000 as a result of the application of Average/Co-Insurance (being 50% of the $100,00)       The average clause usually applies to: Property Insurance; Consequential Loss Insurance;

It goes on with this: -


Quote:

Areas that are always of concern to our clients are the adequacy or otherwise of: Replacement Values for Assets; Declaration of values for Consequential Loss of either Gross Profit, Gross Rentals and/or Additional Increased Costs of Working. It is preferable that you: Obtain periodical valuations by recognised quantity and building surveyors. Changes to the Building Code and Town Planning requirements need to be considered as part of any review or rebuilding costs; Where previous valuations have been obtained when reviewing building values, make allowance for building cost increases since your last valuation, allowing for lead times for council approval and the like; Take into account in respect of replacement costs for plant and machinery, increases in the cost of imports from some countries that can occur due to currency fluctuations. We recommend that you also take current and future inflationary trends into consideration in addition to import duties and effects on values of technological changes.

Lobo wrote on Jan 14^th, 2011 at 1:58pm:

aussiefree2ride wrote on Jan 14th, 2011 at 1:14pm: Please delete wrote on Jan 14th, 2011 at 8:31am: "Boswell is suggesting that the flood component of all insurance premiums be directed to central fund, in an attempt to eliminate this fault in the system" Is this a new thing? That wasn't what he was suggesting the other day - he was proposing to add a levy to ALL insurance policies, to build a fund for natural disasters. Do you even understand your hero's proposal? Keep working on it, you might get there one day, sorry, can`t wait for you. http://www.theaustralian.com.au/national-affairs/nationals-senator-ron-boswell-proposes-insurance-pool-for-flood-disasters/story-fn59niix-1225982331135 "QUEENSLAND Nationals senator Ron Boswell has proposed a national insurance pool to cover flood disasters. Senator Boswell's proposal, which he hopes to raise with Tony Abbott, is centred on a small impost that would be linked to household insurance policies and collected by government. The funds would be funnelled into a national pool." "....is centred on a small impost...." You were saying, af2r???

Perhaps they should have consulted knee-jerk Tony Abbott first, because he is dead-against such a proposal - which he quickly tarred with his "new tax" political brush...

Personally, I don't think that this black hole insurance issue is confined to flood evens - and I reckon that we need our pollies to either look into implementing a broader national "(Natural) Disaster Levy" and/or to revisit (and re-name) the existing insurance provisions of the Fire Services Levy...

Can I suggest, the greatest  problems related to the current Floods will come when future renewal invitations arrive from insurers and it becomes apparent, whether insurers will continue to cover Flood & related Climate Change risks and if so, at what premium?

In answer, to my own question, can I say, it will soon become apparent that the international re-insurance market will commence moving out of these high impact risks, as worldwide events become more regular and therefore local insurers will not provide those covers, as they would go bankrupt if they provide cover without re-insurance support!

That said, if any assessor or insurer starts requesting documentary evidence (aside from photos of the damaged items, which I strongly recommend), then I suggest you go straight to the external dispute resolution provider, as suggested by qikvtec.

perceptions_now wrote on Jan 19^th, 2011 at 10:03pm:

Can I suggest, the greatest  problems related to the current Floods will come when future renewal invitations arrive from insurers and it becomes apparent, whether insurers will continue to cover Flood & related Climate Change risks and if so, at what premium? In answer, to my own question, can I say, it will soon become apparent that the international re-insurance market will commence moving out of these high impact risks, as worldwide events become more regular and therefore local insurers will not provide those covers, as they would go bankrupt if they provide cover without re-insurance support! That said, if any assessor or insurer starts requesting documentary evidence (aside from photos of the damaged items, which I strongly recommend), then I suggest you go straight to the external dispute resolution provider, as suggested by qikvtec.

I know for a fact that the insurers are going to bypass the assessor and raise the level of immediate payout. The homeowner will probably have to provide documents to support many claims.

The insurance company will than offer a total payout on a claim. If the owner takes the payout than the owner will be responsible for building the property. Of course when the owner goes to rebuild they will be unlikely to find a builder that can build for the money that the payout gave due to price increases on building products, wages OH&S, Super etc as well as the fact that builders will be in short supply considering the amout of work necessary!!