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This factsheet provides information on getting an insurance claim paid for storms, cyclones, floods, insurance and you. You should get legal advice to find out your options for getting your insurance company to pay your claim. Print version: |
Please note: this is an online-only publication. On this page:
What will my insurance company pay for?
Your insurance company will pay only what your insurance policy states. Your insurance policy is your contract with the insurance company. It states when, how and what the insurance company must pay for. Most policies state the insurance company will pay for damage caused by rainwater or stormwater, but will not pay for damage caused by floodwater.
What is the difference between floodwater and rainwater?
You will need to look at the defi nition in your insurance policy, but generally:
- rainwater means water falling from the skies that runs off over the surfaceof the land (and may include water overflowing from stormwater drains)
- floodwater means the covering of normally dry land by water escaping or released from rivers, lakes, channels,dams or canals.
The insurance company cannot go beyond the words in the policy. For example, if the policy reads: “Floodwater is water escaping from a river or stream”, and if the damage was caused by water running down gullies of a mountainside, it will not be defined as floodwater and the insurance company will have to pay.
How do I know if the water was floodwater?
Insurance companies obtain reports from experts (such as hydrologists) to determine if damage was caused by rainwater or floodwater. These reports recreate the events that led to the damage. They may calculate what the maximum level the water in your house would have risen to if it was just rainwater and, if the water level is much higher than this fi gure, then they will argue the water is partly floodwater.
Can experts get it wrong?
Yes. Hydrologists’ reports are a recreation of the events that led to the damage. They assess the direction the water flowed, whether the water came from a river or from stormwater runoff, and what level the rainwater would have reached on its own. Their findings are not conclusive, and may be based on false assumptions or inconsistent with reliable eyewitness or video evidence.
What if my home was damaged by rainwater and floodwater?
If your home was damaged by rainwater and floodwater, sometimes the insurance company will reject the claim. Sometimes the decision will be correct, but sometimes it may not. The insurance company may not have considered the following arguments:
- The rainwater came in first.
The water level in your house may have risen and then stopped. A second wave of water then entered the house. This may indicate the fi rst wave was rainwater and the second surge was fl oodwater. The insurance company has to pay for damage caused by the rainwater. - There was floodwater, but only a little.
If the floodwater amount was minimal compared to the rainwater volume, the insurance company may still have to pay.
What if the insurance company didn’t give me a copy of my policy?
The law says the insurance company must:
- tell you if it is prepared to cover your home against flood damage
- do this before the policy is taken out or before it is renewed.
If this was not done, the insurance company must pay for flood damage.This is called ‘standard cover’.
For example, standard cover will apply if you paid the premium at the office and the policy was mailed afterwards.
However, if you receive the policy document in the mail and renew the policy a year later, standard cover will not apply on renewal. You have received documents letting you know the insurance company did not cover you for flood before renewing the policy.
What can I do if my claim is rejected?
If your claim is rejected by your insurance company, you can have it reviewed for free by an independent body called the Insurance Ombudsman Service (IOS). Any IOS decision will be binding on your insurance company, but will not prevent you from taking other action if you are not happy with the decision.
The IOS’ alternative dispute resolution scheme has two steps:
- You need to apply to the insurance company for an internal review.
The General Insurance Code of Practice states insurance companies will respond to your request for internal review within 15 business days if they receive all necessary information and have completed any investigation required. Insurance companies will also keep you informed of the internal review’s progress at least every 10 business days. - If the claim is still rejected after the internal review, you should apply to the IOS within three months of the internal review decision.
The IOS will investigate the complaint, gather the relevant information to determine the claim and then refer the complaint to an adjudicator (claims up to $5000) or a panel (claims up to $280,000) for a final decision.
If you are unsuccessful at the IOS, you can still take your matter to court. You must start your claim within six years from when the claim arose (which may be six years from the date of the ‘insured event’ — ie the storm or flood — depending on what your policy says).
Your policy may also say you need to let your insurer know of the damage as soon as possible. If you do not let your insurer know within a reasonable time, they may be able to refuse your claim – so do not delay.
Contact the IOS on 1300 78 08 08 (toll free) or visit www.insuranceombudsman.com.au
For a copy of the General InsuranceCode of Practice, visit http://www.codeofpractice.com.au/
What should I do to prepare my claim?
You should collect detailed evidence about the damage. The more detail you obtain, the easier it is to establish the cause of the loss.
You should try to gather evidence such as:
- eyewitness accounts about the time the water entered the house, the level it rose to, where it came from, how it fi rst entered the house (eg through toilets and showers or over land) and whether the water level increased in stages or at a steady and uniform rate
- maps showing rainwater drains in the area (you may be able to get copies from councils
- information about when any river levels peaked
- photos, videos and other fl ood records, including home videos and, if possible, news footage.
Do I need a lawyer?
No, the IOS is designed for people who do not have lawyers. However, some fl ood insurance cases are diffi cult and you may need help from a lawyer. You can contact Legal Aid Queensland for free legal advice. The National Insurance Hotline may be able to provide free advice and help with running matters at the IOS if you are not eligible for legal aid. Contact the National Insurance Hotline on 1300 663 464.
For more information about getting your claim paid, see our guide Has your property been damaged by a storm, cyclone or flood?, which you can download from www.legalaid.qld.gov.au