Home Insurance Companies
Insurance is a very important product. Australian’s know this now more than ever due to the recent national disasters that have occurred in 2011 such as the Queensland Floods, The Victorian Floods and Cyclone Yasi. Many families found themselves uninsured due to a lack of understating of what their policy contained and in financial ruin. It is a hard lesson to learn and Australians’ hearts go out. Some home insurance companies did provide cover for many of the victims and some didn’t. Choosing the right policy from the right company is absolutely vital.
The QLD floods were the worst in Australian history affecting one third of Queensland; an area bigger than France. Many people lost their homes and thousands more had damage from flash floods or rising water. The problem was that in the eyes of the insurance companies, rising water and flash flooding were two different events and as a result many people found themselves not able to make a claim.
In the case of the QLD floods, many people had water inundation due to the rising level of the rivers and creeks as a result of the large amount rainfall. But many companies only covered for flash flooding, not rising water. Flash flooding did occur in many parts of QLD, and the flash flooding in some areas were responsible for massive destruction of property and also loss of life. Flash flooding is moving/rushing water rather than a slowly rising river.
The differences in the policies were seen to be so minute but they were clearly there. Many people in QLD assumed they were covered but were not and it has brought to light the importance of reading the Product Disclosure Statement (PDS) which is where it explains what you are covered for. The insurance companies are calling for a ‘flood plains’ map to be developed so companies can properly ascertain the risk of flooding in these areas. Gail Kelly, CEO of Westpac – Australia’s largest mortgage provider, has suggested she will look into implementing compulsory flood insurance for homes financed by Westpac and in flood plain regions.
This whole debate going on about insurance policies is only going to be good for the industry. It will make way for changes in the way policies are written and explained and will has already opened the eyes of many policy holders who had never read their PDS before. But these changes will take time and in that time there will be some home insurance companies in Australia that offer better cover than others. Read the PDS before you purchase so you know exactly what you are covered for.
