The floods in Eastern Australia in May 2022 were among the worst ever recorded in Southeast Queensland. Brisbane, Caboolture, Gold Coast, Ipswich, Logan, Maryborough and Toowoomba saw catastrophic floods throughout, leaving a path of devastation in its wake. The natural disaster response included government assistance funding, relief efforts and flood appeals. In planning for the worst, many people have Residential or Business Insurance Policies which provide coverage for damage to property caused by floodwater either through the standard inclusion or nonstandard inclusion, opt in at customer request.
Pursuant to the Insurance Contract Act 1984 (Cth) section 13, insurers must act in good faith whereby specifically advising any unusual part of the policy which would result in a claim being refused, acting swiftly and reasonably in deciding any claim. This is due to the insurer having a greater understanding of the risks being transferred, more negotiation leverage, and insurance law expertise.
Once a claim has been lodged, the insurer requires further investigations to be conducted to assess the extent of the flooding on an individual property basis. In Australia, the term “flood” refers to the covering of typically dry ground by water that has escaped or been released from the regular bounds of:-
- any lake, river, stream, or other natural watercourse, regardless of whether it has been altered or modified; or
- any lake, canal, or dam.
Insurance claims are refused due to five (5) main reasons:-
- Damage not caused by disaster, insurance coverage will only cover damage produced by an insurable incident, not pre-existing harm.
- Non-disclosure, not revealing important facts while applying for or renewing the policy, such as neglecting to declare appropriate insurance claims, criminal offenses, or existing damage.
- Operation of a condition or exclusion clause, failure to comply with an insurer’s mandate, such as property maintenance or the insurance does not cover losses caused by normal wear and tear, damage caused by improper construction/design, subsidence, erosion, and seepage.
- Fraud, the insurer believes you engaged in dishonest behaviour in order to deceive the insurer with reckless disregard.
- Policy cancellation as a result of further information presented, indicating an increase in the insurer’s risk, which is unacceptable, or failing to pay the policy’s premium.
If your claim has been refused there are several options available to you. Complaining to the insurers Internal Dispute Resolution or the General Insurance Division of the Australian Financial Complaints Authority (“AFCA”); or applying to the Court against the insurer.
If you have any questions or concerns, please contact our experienced and dedicated property, land, conveyancing and litigation solicitors at Macrossan & Amiet Solicitors.
