- by foxnews
- 26 Nov 2024
Thousands of victims of the floods in New South Wales and Queensland will be unable to claim on their insurance due to exclusions in policy fine print, the Financial Rights Law Centre says.
What is covered by insurance policies varies wildly between insurers because definitions of events including flood, rainwater runoff and wind damage are not standard, the group said in a new report.
But many will find they are not covered because the fine print excludes particular types of damage, MacRae said.
He said this even applied to flood damage, which was given a standard definition after floods in Queensland in 2011, when the Brisbane River broke its banks and inundated low-lying Brisbane suburbs as well as regional centres.
One insurer, NRMA, has included rainwater runoff in its definition of flooding, the FLRC report said.
In its report, Standardising General Insurance Definitions, FLRC found 65% of the insurers it examined considered flood and storm to be separate events but the rest lumped them in together. Some insurers also included wind, hail, rain and cyclone under the definition of storm but others did not.
One insurer, RACV, also allows itself to remove flooding, rainwater runoff and storm surge damage from a policy if it deems a property at risk of these events, FLRC said.
The research found that more than 75% of policies excluded damage to retaining walls, 25% excluded damage to bridges and 62% excluded damage to driveways or gravel paths.
The Insurance Council of Australia said 107,844 claims have been lodged over the floods in NSW and south-east Queensland, estimated to be worth $1.62bn.
He said terms needed standardising so that policyholders could use the new Consumer Data Right (CDR), which allows consumers to share their data with providers.
He said the problem had been obvious for years.
The government committed to standardising insurance on the recommendation of a Senate inquiry in 2017 and began a consultation process in 2018.
But progress stalled because treasury was focused on the banking royal commission, which kicked off in 2018, and its recommendations, which commissioner Kenneth Hayne handed to government in February 2019.
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