Flood Cover In Australia

Following the Queensland floods in Australia in early 2011 there was the widely reported aftermath of devastation of lost homes, lives lost and forever changed and previously stable businesses that have never opened their doors since. Once the floods receded the towns and their people started rebuilding their towns and putting their families back on their feet however they could, the rest of us looked at our own lives and situations. This was no longer a distant country that we could donate a few dollars to feel good about ourselves and feel happy that we live in "the lucky country" , this was our fellow countrymen that were experiencing the turmoil that we witness so often in the modern world.

When we witness such loss and devastation so close to home we absorb the images of those so closely linked to us, those we may know or who bare uncanny similarities to our lives and we start to wonder, "what if"

This is immediately apparent to anyone to anyone in the insurance industry, as all insurance companies, brokers, agents, claims staff, and employees have been asked by a large portion of their clients for the first time, "Am I covered by flood?"

Some of the clients have never asked this question before in their lives. Once it becomes 'close to home' its one of the first thing on our minds. Hindsight is a wonderful thing.

However what about those in Eastern Australia that did not ask this before the flood? If they found their home or business had no flood cover is it their fault for not asking? Or have the insurance companies been at fault for selling policies that are inadequate?

The answer is not as simple as everyone would like it to be. The consumers, the insurers, and the government all need to step up and take ownership on their responsibilities to ensure our insurance is adequate. This is all well and good to give even allocation of responsibility to all parties involved in the situation but what does this mean?

Well quite simply there needs to be a clear communication between all parties that creates a semi government controlled system with minimum requirements for home insurance policies to ensure that a minimum standard of cover is received by all home owners in Australia. Also cover for home owners should be made compulsory which achieves 2 things, firstly the premium pool is increased to help pay out in the event of such a situation and also the government is then not expected to deliver large handouts to those who did not have cover in place. When a similar event occurs in Australia future we would all be in a position to have a better chance to rebuild our lives.

The government may not have implemented this system, the Queensland Government didn't even fully insure themselves for this scenario, but can we just blame them? What about the thousands that when shopping for their insurance looking at nothing but the price? The consumers that had policies that covered flood but changed insurer to save $100 and didn't compare the policy, just the price. As hard as it is to ask, are they at fault themselves for not being insured? Yes, a certain amount of the responsibility has to fall with the consumers who purchase the products. If they shop around looking at nothing but the cheapest price then their chances of ending up with inadequate cover is extremely high. The consumer must ask the right questions and compare not just price, but also the cover.

How can we protect the consumer from themselves? If we develop a minimum level of cover that is provided by insurers, the claims will cost more and therefore the premiums will be higher for even the minimum cover, whioch will no doubt give cause for complaint.

If the government gets massively involved in this part of the industry then choice of insurer and levels of cover decrease and obligations and restrictions increase, once again rising to many consumers having a cause for complaint.

I would advise, take matters into your own hands, look at your own insurance cover. Enough with handballing responsibility. It's your home. Its your business, it's your responsibility to ensure that you have the right advice to protect your assets. With over 70% of consumers inadequately or underinsured don't assume what cover you have, ask, research and make certain that your cover will perform exactly as you hope before you have a claim, don't wait until its too late to discover your policy doesn't respond as you thought it would.