As many people in multiple states are suddenly finding, what constitutes a flood changes with almost every insurance company. Some insurers, Suncorp among them, have said they will honour claims for flood damage, which is a nice piece of PR in a disaster. However, some of the companies it owns, AAMI among them, have already denied claims for flood damage using the “fine print” definitions to argue a “rising river event” is not the same as a flood!
Queensland Premier, Anna Bligh, has indicated aggrieved policy-holders might be allowed to give evidence to the Parliamentary Inquiry into the Queensland floods.
The Federal Government has already expressed some concern about the fine print definitions of what constitutes a “flood”, and, while the Insurance Council of Australia (ICA) proposed a standard definition in 1998, it was rejected by the ACCC, because of a number of concerns it had. (www.accc.gov.au/content/index.phtml/itemId/841725 )
The ACCC left open the possibility of approval for a new common definition from the ICA: none appears to have been forthcoming. So, the insurers continued to use their fine print and differing definitions, and rely heavily on the fact that many (most?) consumers don’t read the contract, but rely on the explanations given by a sales person, who might, or might not, be intent on meeting a sales target and achieving a bonus.
If you want to contact APRA about insurance, go to http://www.apra.gov.au/contact/form.cfm
It would seem timely for a full and open inquiry by APRA into all aspects of insurance policies to be held. I think it should be held concurrent with, or very soon after, the Queensland Government’s inquiry into the floods. I suspect that the Insurance Council of Australia and an assortment of industry lobbyists will now be in politicians’ ears trying their best to prevent such an inquiry, or at least try to dilute any terms of reference. It should examine all definitions of various events: flood, fire, storm, and other events.
I hope that the following does not represent the typical insurer of people in Queensland, or anywhere else in Australia.