Fast insurance payouts are essential to allow people to rebuild their homes and lives after a natural disaster. In the summer of 2011 Queensland had catastrophic floods that inundated 75% of the Queensland land mass. That means that an area the size of France and Germany combined was totally under water. Many people had insurance for flood damage and have now made claims against their insurance policies only to be told that they were covered for the wrong type of flood damage.
Even as I write this in March 2011 the small town of Cardwell in far north Queensland is back under flood water for the 4th time since mid-December 2010. It will be interesting to see how the various insurance companies will assess these claims.
Different Meanings:
The problem with insuring your house, car and contents against flood water damage is making sure that you understand all the flood terminology as the insurance companies define flood. Even between different insurance companies, flood damage can be defined differently in the insurance policy under the terms and conditions.
As far as the average insurance policy holder understood it in the past, damage to property by flooding meant anything that became damaged due to water flooding their home, car or possessions constituted flood damage.
This water damage should be classified as being damages caused by flood water. After all, if water rushes into your home and through your home; whether that comes from the skies opening up, a storm drain that wasn't built big enough to take the water load or a creek or river that overflows its banks, should constitute the meaning of flooding in everyday use of the English language.
Unfortunately for many flood insured Queenslander's, some insurance companies define flood differently.
Storm Water flooding:
Storm water flooding is defined as water damage caused by an overflowing culvert or storm drain. Storm drains are built around our towns and cities to take the rush of excessive water away from and off our streets. When these storm drains get clogged up with leaves, litter and other debris, blocking the flow of water and causing it to run over into streets and houses, is termed by some insurance companies as being storm water flooding. Unless this type of flood damage is specified in the terms and conditions of your insurance policy you won't receive any compensation if:
(a) Storm water flood damage is not defined in precise terms in your insurance and
(b) If the flood damage is caused by any other type of flooding
Storm and Tempest:
If your flood damage is caused by excessive rainfall, hail and any other 'common' tempestuous storm damage and you have these exact terms in your insurance policy then you will be covered. However, if you live in an area where Cyclones (Hurricanes in the northern hemisphere) are likely, you will need these types of tempest storms to be covered under another type of policy.
Riverine Flooding:
Riverine flooding comes from a river or a creek or a well-known and clearly defined natural water-course overflowing its banks. If this has been the cause of your flooding, then you are covered on your insurance policy for flood damage.
Flood Terminology Needs Clear Definitions:
With so many different definitions of what constitutes flooding in the insurance industry, each Queensland claim has to be investigated to see which type of flooding caused the excess water to damage homes, cars and contents and then to make sure the insurance policy holder was covered for that type of flood damage.
Needless to say, this mess of definitions for flood damage is causing distress and hardship to people who have already been traumatized.
The irony is that many of these traumatized people are shareholders of the insurance company they are now fighting for natural justice.