Insurance Law - Rainstorm, Flood Insurance and Cyclone Insurance Claims - Part 3
Date: February 02, 2011
Authors: Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
The recent flooding in Queensland and Victoria has led to much uncertainty concerning the scope of cover of insurance policies when dealing with different types of flood events. We hope this article wil be informative for you and help shed some light on this complex area of law. Should you have any questions or queries do not hesitate to contact LAC Lawyers.
Flood Insurance and the affect of 'Unusual Terms'
There is one final point to consider.
The Insurance Contract Act obliges insurers to particularly notify insured’s of what is regarded as an “unusual term” prior to the contract of insurance being entered into. If such notification does not take place, insurers cannot rely upon such an unusual term to deny a claim. To do so amounts to a breach of the duty of utmost good faith owed to insureds by insurers. The notification must amount to a description and explanation of the effect of the term rather merely than notifying the term itself.
Having regard to the complexity of flood coverage, it might be possible to argue that insures operating in Queensland were obliged to specifically point out the difference between rain, flash flooding, riverine flooding, storm and cyclone cover and specifically explain to insureds, in clear English, what amounts to riverine flooding and the fact that is it is not covered. If this has not occurred, it may still be possible for certain insureds to successfully argue that insurers cannot rely upon the traditional flood exclusion.
Assessing such complex claims always gives rise the exercise of discretion on the part of the insurance claims departments. It is for this reason that politicians are asking insurers to look at insurance claims with compassion. On the other hand, requires insures to pay for flood claims where those insurers have not taken any premium for riverine flood risk is not necessarily a fair outcome either. The inevitable result will be a future reduction in the availability of wide spread flood cover or the increase in insurance premiums required for such cover. Neither outcome is in the best interest of insureds.
The better solution is for insureds to be aware of the insurance policy cover they are buying for home and contents and, wherever possible, choose those insurers who have not excluded any flood loss.
In relation to the problem of uninsured flood loss cover, the better solution is to discourage construction in flood (or fire) prone arrears or to insure that such construction is, to the greatest extent possible, flood or fire proof. The lessens learned as a result of Cyclone Tracy in 1974 lead to very effective cyclone – resistant building construction methods being introduced into the Northern Territory. The tragic events of Black Saturday in Victoria have also seen the introduction of tougher construction codes for houses in bush fire prone areas.
The article is not intended to provide specific legal advice. It is intended to provide guidance only. Persons reading this article should be aware that the legal statements may not be applicable to their individual situations.
Insurance Law - Rainstorm, Flood Insurance and Cyclone Insurance Claims - Part 1
Date: February 02, 2011
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
During December 2010 and January 2011, large areas of central and eastern Queensland have faced the full fury of nature in the form of devastating rain storm, flash flooding over land which is generally completely dry, and flood from overflowing watercourses being streams, rivers, lakes or reservoirs. In late January / early February, coastal Queensland is also being threatened by a category two and by a category 5 hurricane which might cause further damage to infrastructure, homes and businesses.
Insurance Law - Rainstorm, Flood Insurance and Cyclone Insurance Claims - Part 2
Date: February 02, 2011
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
The law in this area is complex. The precise policy wording needs to be taken into account and legal advice should be obtained. By way of general proposition only, the following statements maybe relevant.
Insurance Law - Queensland Flood Claims - Insurers Response
Date: January 25, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
On Friday 21 January 2011 an article appeared in the Sydney Morning Herald written by Eric Johnstone, Kirsty Needham and Josephine Tovey to which we refer you. The article is headed “Insurers say no to Brisbane” and we quote as follows
Insurance Law - Queensland, New South Wales and Victorian Flood Claims - Part 1
Date: January 21, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
During the course of the current storm disaster catastrophic damage has been experienced in all of the eastern states of Australia. Interestingly we have all heard of estimates of $500M, $1B, $5B and now $20B from the ANZ’s economists. In other words the rebuilding costs for floods will be substantial. As the Queensland Premier says, the damage bill will be noteworthy and that 28,000 homes will need to be rebuilt at a cost of approximately $8B out of a total rebuilding cost of $20B.
Insurance Law - Queensland, New South Wales and Victorian Flood Claims - Part 2
Date: January 21, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
In all such cases where there has been catastrophic water damage through the incident of storm and/or flood it is obvious that the full benefits of an insurance policy are more fully available where the cause of the damage is storm. That is, even where an insured does not have the benefit of flood cover and they can rely upon their policy of insurance for storm cover they are far better off irrespective of the type of building damaged without extending the policy.
Insurance Law - New South Wales and Queensland Emergency Flood Claims
Date: January 06, 2011
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Recently Eastern Australia has been swept by massive storms which have caused extensive storm and/or flood damage to both domestic and business establishments. The problem when it comes to flood damge is that many insureds fail to understand what their rights are and that under many policies flood damage is either not covered or only nominally.
Insurance Contracts Act - Changes to Insurance Law and Practice for Insureds, Insurers and Brokers
Date: August 02, 2010
Author(s): Michael Pickering B.A., LL.B. (Hons.), LL.M., M. A.
Important amendments to the Insurance Contracts Act 1984 (Commonwealth) (“the ICA”) were expected to be passed by the Commonwealth Government in the Spring session of the 2010 Parliament. Their passage will now have to await the sitting of the new Parliament in late 2010.
Insurance Law - Product Liability
Date: May 10, 2010
Author(s): LAC Lawyers
Generally product liability in law refers to the responsibility or the liability of manufacturers, distributors, suppliers, retailers, and others who produce and supply goods/products to the public which result in damages or injury caused by the use of a defective product.
Home Warranty Insurance
Date: December 31, 2008
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
There is an approved list of insurers who sell home warranty insurance for residential building work in NSW under the Home Building Act 1989. Essentially home warranty insurance is required for residential building work including the supply of a kit home where the value of the work exceeds $12,000. Previously minimum cover was stipulated at $200,000 but from 1st March 2007 this was increased to $300,000.
Insurance Law and Business Interruption Insurance
Date: December 05, 2007
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
People in business insure their premises, contents and stock against the material damage risks of fire, explosion and other perils, but have they given the same thought to the other problems which would arise following any of these events, the problems which manifest themselves when the fire engines have driven away.
Insurance Law - Storm Claims and the Newcastle/Hunter Region
Date: June 21, 2007
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Although underinsurance or the lack of insurance is a major problem for the community in both good and bad times its importance is critical in times of natural disasters including storms and cyclones. Every time there is a major storm either general or localised flooding is a problem.
What to expect when you call LAC Lawyers
Date: December 13, 2006
Author(s): LAC Lawyers
LAC Lawyers is a full service firm dedicated to the provision of superior legal services in Australia. Our aim is to provide unrivalled client satisfaction coupled with high quality service and advice. When you call LAC Lawyers our friendly reception staff will spend time with you to identify the area of law your enquiry relates to then pass you on to one of our qualified solicitor's who can help you.
Insurance Law - The different types of Insurance Claims and why they are sometimes denied
Date: October 09, 2006
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Claims are often denied by insurers for a variety of reasons. They may have been denied for anything from non-disclosure of material fact through to fraud or over-capitalisation of loss. Interestingly, there has been a fundamental change over the last ten years in the approach taken by insurers with the denial of claims.
The Benefits of Hiring A Lawyer
Date: August 16, 2006
Author(s): LAC Lawyers
The old adage “you get what you pay for” is as true today as it has ever been.
Australian General Insurance Claims Practice
Date: August 02, 2006
Author(s): LAC Lawyers
Why stay with your lawyer
Date: August 01, 2006
Author(s): LAC Lawyers
The lawyer/client relationship is a personal one and there are many reasons which will dictate who you can and cannot work with. If you don’t like your lawyer, should you change? Ultimately, the relationship between a lawyer and client must be built on mutual trust.
Does The Duty of Utmost Good Faith Apply to Claims
Date: May 04, 2006
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Originally the duty of utmost good faith was a common law concept which applied directly to contracts of insurance.
Why Insurance Claims Are Not Paid
Date: May 02, 2006
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Claim Brokers
Date: May 02, 2006
Author(s): Frank Egan B.A., LL.B., A.C.L.A., F.T.I.A. (Notary)
Many corporate, commercial and business insureds shrug off the idea that they won’t get a fair deal from their insurer because of their buying power and they have an Insurance & Risk Manager, a Company Secretary/Finance Director and/or an Insurance Broker who are there to ensure this can’t and won’t happen. Think again.
What Impact Has Civil Liability Act 2002 (NSW) Had On Damages and Personal Responsibility?
Date: February 12, 2006
Author(s): LAC Lawyers
Essentially the change has been profound as people are now required to look after themselves and take responsibility for their actions. The Civil Liability Act mainly deals with the question of damages whereas the amending Act deals with liability, but, with that said, the courts now pay proper respect for the concept of personal responsibility as required under the Civil Liability Act 2002 (NSW) ("the Act") and the Civil Liability Amendment (Personal Responsibility) Act 2003 ("the Amending Act").
What Insurance Crisis - Is There Really One Following The Collapse Of HIH and FAI?
Date: February 12, 2006
Author(s): LAC Lawyers
Many commentators have gone out of their way to suggest there was an insurance crisis and that it arose out of increased litigation, more successful claims and higher awarded damages which led to the unaffordability of public, products and professional indemnity insurance.