With massive floods  damaging large parts of Queensland and  currently in Victoria ,  the insurance companies   are surely going to come  under more scrutiny  than any other corporate sector  due  wide damage done to houses and businesses in Australia due to the floods.

The floods  will not only  leave many of the people with nothing much to hang on too ( specially those who are not covered) , but will also deliver a massive  blowout to the insurance companies  and their profits as well.

So, Are you covered for  floods  ? what are the different type of food Insurance  covers ?

Irrespective of the damage that has wrecked many households , the insurance companies are here to run a business , and run it profitably, so they are not going to pay out claims if it is not covered out of good generosity. In fact many will be willing to argue that  they will not cover  floods even if   the insurance cover is a sort of a grey area ( like different type  of floods  Insurance covers).

http://www.facebook.com/pages/Australian-Floods-Disaster-2011

Riverine or inland floods

Consumer group Choice examined 45 insurance policies available nationwide and found only 13 – about 30 per cent – cover riverine or inland floods, or the swelling of river and creek banks, problems commonly seen as rains battered Queensland. Riverine flooding is caused by rivers and creeks swelling “due to long duration rainfall over large catchment area.

What is my flood cover with insurance company ?

Because flood cover is not offered in most house and contents insurance policies, people may find out too late that they are not covered for the losses caused by a flood. Floods occur when rivers; creeks; lakes; dams; reservoirs; and other natural watercourses (even if modified by humans) burst their banks or overflow.

However your policy will probably cover you for stormwater and possibly rainwater damage. Insurance companies generally define these events differently.

Different type of flood covers

• storm water damage occurs when the storm makes an opening in the roof or walls and lets water in; and
• rain water damage occurs when the rain gets into your building because it cannot drain off the land any other way; and
• flood damage occurs when rivers, dams, lakes and natural watercourses (even if they are often dry) overflow.

You should check with your insurance company if you are unsure whether your existing policy covers damage caused by storm and/or flood. Ask them to clearly explain that part of your policy where flood cover, or flood exclusion, is contained. This will allow you to work out whether to change your policy if you need insurance for flood damage.

Of the three types of flooding, the type most commonly covered is flash flooding or storm water flooding, according to the Insurance Council.

It has become common for some insurers to provide cover against ‘ flash flooding’ which is a more popular insurance that the insurance companies have sold recently. This occurs  when the damage to your property occurs within 24 hours of the rain that caused the flood. This cover may be optional (you have to pay more, and it may only cover you for a smaller amount eg 20% of the sum insured).

Deciding whether you need flood cover ?

Flooding may occur only rarely, say once ever 50 or 100 years, and reliable facts can be hard to come by. Here are some likely sources of information:

• your Council may be able to tell you straight away if you live in a flood prone area. (Even if the Council cannot answer this question directly, Council staff or elected members of the Council may at least be able to tell you if flooding has occurred in the area.);
• the local water authority
• local newspapers;
• local solicitors or conveyancers who handle property matters;
• insurance companies who do business in the area;
• local insurance brokers; and

Insist on getting the policy in writing before you buy, because you need time to understand and compare the wording of different policies to make sure you get the right protection. Its is best not  to  buy flood insurance over the phone without reading the policy first.

The Queensland floods may cost insurers and reinsurers worldwide as much as $6 billion in what might be Australia’s costliest disaster in history, Bloomberg has reported  and it is still growing.

More information

• Flood and storm damage
• Home insurance
• Flood crisis 2010-11 – insurance, loan repayments and financial hardship
• Insurance Council of australia
• Three Types Of Flood Insurance Coverage
• Aami customers please read
• 2010/2011 Queensland flooding