In this section
START OF Publications and resources
START OF Legal information guides
END OF Legal information guides
END OF Publications and resources
This guide is designed to help Queenslanders with their insurance claims after a storm, cyclone or flood. This guide provides advice on home building and contents insurance policies; it doesn’t provide advice on other types of insurance such as motor vehicle insurance policies.
Download print version(PDF, 489KB)
Please note: this publication is only available online.
This guide is intended to provide you with information only. If you have a legal problem, you should get legal advice from a lawyer. Legal Aid Queensland believes the information provided is accurate as at March 2022 and does not accept responsibility for any errors or omissions.
We are committed to providing accessible services to Queenslanders from all culturally and linguistically diverse backgrounds. If you would like this publication explained in your language, please telephone the Translating and Interpreting Service on 13 14 50 to speak to an interpreter. Ask them to connect you to Legal Aid Queensland. This is a free service.
This handbook has been produced with help from: Legal Aid NSW, in particular David Coorey; Insurance Law Service (NSW); Consumer Credit Legal Service (NSW); the collaborative Victorian authors of the Bushfire Legal Handbook, June 2009; Paul Watson, (Insurance and Superannuation), Maurice Blackburn Lawyers; John Berrill, (Principal, Head of Insurance).
This guide is designed to help Queenslanders with their insurance claims after a storm, cyclone or flood. This guide provides advice on home building and contents insurance policies; it doesn’t provide advice on other types of insurance such as motor vehicle insurance policies. The Legal Aid Queensland website may provide information and advice regarding other types of insurance; please refer to our factsheets and legal information guides at www.legalaid.qld.gov.au.
This guide can help you when dealing with your insurer, and presents arguments that may help you to have your claim paid. You can dispute an insurer’s decision, without having to go to court, through an independent, effective and free alternative dispute resolution scheme called the Australian Financial Complaints Authority (AFCA), call 1800 931 678 or visit www.afca.org.au.
The law about home building and content policies is set out in federal legislation, the Insurance Contracts Act 1984 (Cth) (“Insurance Contracts Act”) and in court cases and ombudsman decisions made about insurance.
This guide refers to obligations that insurers have voluntarily agreed to in the General Insurance Code of Practice. For more information visit www.insurancecouncil.com.au/cop.
Please note that this guide does not deal with the liability of third parties such as local councils, land developers, mining companies or builders. Whether any third party should have to pay for the damage is an issue that will vary from case to case. You should get legal advice about the possibility that your losses are due to the actions of a third party. Be aware that time limits apply to cases against third parties.
If you plan to lodge an insurance claim for damage to your home building or contents, it is important to gather as much information as you can to support your claim. You need to be able to prove your loss—this means that you need to provide evidence to prove what you owned. This may include:
The amount of evidence required by your insurer will depend on the nature and value of your claim. For building claims, expert reports might be needed about the cause of the damage, the extent of the damage and/or the appropriate way of putting things right. This will usually only become relevant if there is a dispute over your claim.
If your home or contents have been damaged by rainwater or floodwater, read the “How do I prove the cause of the damages?” section of this guide for information on the type of evidence you can gather to show how and when water entered your property.
Even after lodging your claim it is worth thinking about what evidence you can gather to help fast track your claim.
If you need an interpreter to put your claim together, let your insurer know this and ask them to pay for this service.
Most claims start with a phone call to your insurer or lodging it online with your insurer. When making a claim over the phone, be brief and precise. Ask family, friends or support agencies for help to lodge your insurance claim as soon as you are able. It is worth making notes of any conversations with your insurer, including the time, date, who was there and what was said, as your claim progresses.
Once you have lodged your claim your insurance company may ask for more information. Seek legal advice if you cannot provide information or documents requested by the insurer.
Insurers employ assessors to investigate claims. The insurer may send an assessor or an adjuster to consider your claim. This will usually happen in large claims for home and/or contents insurance. Their role is to consider all relevant information to determine what happened and whether or not the event falls within your insurance policy. It is important to ask the assessor questions if you are uncertain about anything.
The assessor may interview you, neighbours, witnesses and review police reports. If you feel you are being unfairly treated by the assessor you should seek advice or help—for example, you may want to ask for an interpreter, or a friend to sit in on any interviews. If you are unhappy about your treatment, write to the insurer about your concerns and outline what you want the insurer to do or change.
For example, you might disagree with the assessor’s version of events (ie the order and timeline of events that happened). Explain in writing:
Do not sign any document until you understand what it means
If an assessor asks you to sign a statement, ask them if you can take it away and look at it, rather than signing it on the spot. If you are unsure about signing it, get legal advice. Legal Aid Queensland can assist with free legal advice about documents your insurer asks you to sign such as an insurance release form.
You should get urgent legal advice if the assessor wants you to drop your claim or is suggesting a version of events that is likely to end in your claim being refused or reduced.
With a large scale disaster, there may be a general response from your insurer letting all those affected by the disaster know what your insurer expects you to do. Check with your insurer.
If possible, talk to your insurer before touching or moving anything in your home after an insurable event (such as a fire, storm or theft). In the event of criminal activity (such as a break and enter) contact the police. If your home is exposed to further damage from the weather, or your premises can no longer be secured (for example, locks, windows or doors have been broken), only do what is necessary to prevent further damage or loss. Your insurer will want an assessor to examine the damage before making a decision in relation to your claim, and will want to approve a repairer.
If you go ahead with repairs it would be useful to take “before” and “after” photos of the house and its contents as evidence of repairs required. Keep any receipts of payment made.
If your house and contents were damaged by a deluge of water it is possible your insurance policy will not pay for flood damage, but it may pay for other types of water damage. Read your policy carefully. Read the “My home and contents have been damaged by water—what do I need to know?” section and subsequent sections of this guide before you put your claim together.
It may be important to prove to your insurer that your property was damaged by rain and storm water before it was inundated by flood water. If you have any eyewitness accounts of what happened and when, you should record the order of events. This would include when the rain deluges occurred, what your neighbours saw, what you saw, when the water levels began to rise, and what height the water reached.
Insurance policies differ in their coverage of damage incurred by rainwater and/or flooding. If this affects you please read the “Rainwater versus floodwater — what does my policy cover?” section of this guide for more information on how to progress your claim.
Yes. The General Insurance Code of Practice ("the Code") says insurers must fast-track your claim if you are in urgent financial need. The Code sets out the guidelines that insurers need to follow when dealing with claims and complaints. You can find out more about the Code at the website www.insurancecouncil.com.au/cop.
If you can demonstrate to the insurer that you are in urgent financial need of the benefits you are entitled to under your policy, part 8 of the General Insurance Code of Practice requires the insurer to fast track the assessment and decision making process for your claim.
The insurer must make an advance payment to help alleviate your immediate hardship within five business days of you demonstrating your urgent need.
Examples of urgent need include:
Any advance payment will be taken off the total value of your claim. Talk to your insurer about your situation. If you cannot come to an agreement with your insurer, read the sections "When will my insurer advise if my claim is accepted?" and "My insurance claim has been refused - what are my options?" for information on your options.
The excess is the amount you have agreed to pay (if any) if your insurance claim is successful.
If you are in financial difficulty, you may not be able to pay the excess. If this is the case, ask your insurer to take the excess out of any claim you are to be paid. Alternatively, you can ask to make payments by instalments. It is unreasonable for your insurer not to agree to do this. Your insurer cannot refuse your claim just because you cannot pay the excess up front.
If you think the insurer is being unreasonable-lodge a dispute about this issue with AFCA. Refer to the "Can't pay excess" sample letter in samples.
Your insurer may have further reasonable questions about your claim. If you can, answer them as quickly and completely as you can, or advise the insurer that you cannot help with their questions. Your insurer should let you know how long a fully completed claim will take to assess.
The usual timeframes under the Code (clauses 67–71) (unless there is urgent financial hardship) are:
Your insurer is required to provide an update on the progress of your claim at least every 20 business days.
It is perfectly acceptable to call your insurer to check on progress (keep notes of these calls) and to expect to be given updates on timelines.
If your claim becomes urgent (because of your finances or otherwise), let your insurer know in writing.
If you received an insurance claim payment for damage caused by a catastrophe or disaster and then realise you have more damage to claim, you have 12 months from the finalisation of your claim (if finalised within one month of the disaster) to ask for a review of your claim (clause 90 General Insurance Code of Practice).
If the review is refused or partially rejected then you can complain about this to the insurer’s Internal Dispute Resolution (IDR) department and then to the AFCA. Read the “My insurance claim has been refused – what are my options?” section of this guide for more information.
Sometimes you can get stuck in limbo waiting for your claim to be finalised, eg where you have submitted a claim but have not received an answer from your insurer, or you ring your insurer and they keep asking for more information or they are saying your claim is still being processed.
The Code (clause 68) states that an insurer must respond to a claim within 10 business days of receiving the claim. If your insurer requires further information or assessment then they must notify you within 10 business days of receiving your claim, and outline:
If your insurer is not making a decision and not informing you if further information is required or why there is a delay, you could send a letter to your insurer. Refer to the sample letter “Delay” in samples.
If your letter doesn’t result in a response from your insurer you can send a letter of complaint to Insurance Code Compliance Committee. Refer to the sample letter “Complaint to Insurance Code Compliance” in samples as a guide.
A written complaint should assist in getting a response. However, if this is unsuccessful you could refer the matter to the AFCA. Refer to the sample letter “AFCA” in samples as a guide.
If you are concerned at any stage in this process, seek legal advice.
Many insurance policies provide coverage for damage to property caused by floodwater. If flood cover is part of your insurance policy, your claim should be paid. Some insurance policies allow you to opt out of flood cover.
If flood cover is not part of your insurance policy, seek legal advice. If you wish to dispute the amount the insurer is paying you for your claim, seek legal advice.
The Insurance Contracts Act (“the Act”) sets out the ways in which insurers must behave. The main aspects of the Act relevant to water damage claims are explained below:
Section 13 of the Act imposes a duty on both the insurer and you, the consumer, to act in the utmost good faith towards each other.
The duty of utmost good faith can help you by allowing you to argue that your insurer should:
If an insurer has failed to clearly inform you that floodwater damage is excluded under your policy, section 35 of the Act may help you establish that the insurer should pay for flood damage. Section 35 of the Act requires the insurer to notify you, as the customer, of any deviations from the minimum cover provided under standard cover contracts. For more information, read the “What if my policy is confusing or I didn’t get a copy?” section of this guide.
Apart from the Insurance Contracts Act, insurers are subject to the General Insurance Code of Practice. This guide refers to the Code where it can assist you with your claim.
The policy states the risks your insurer has agreed to pay for. The insurer cannot go outside the policy wording. It can only refuse to pay a claim for floodwater damage if flood cover is not included in the policy.
There may also be other exclusions in the policy that you should be aware of including no cover for damage to fences or retaining walls or no cover if you have failed to maintain your property.
Your insurance policy document will state specifically what risks the insurer has agreed to pay for. Your insurer will be able to give you a copy of your insurance policy document. It is important to check you have been provided with the right copy of your policy.
Business contents insurance policies may provide cover for loss caused by floodwater. If you were working from home, you may have a business insurance policy and not a domestic building policy.
Many, but not all, insurance policies provide cover for damage caused by a flood. You should seek legal advice if you are uncertain about whether you are covered, opted out of flood cover or disagree with the amount the insurer is paying you for your claim.
If your insurance policy does not cover for flood, the insurer is likely to ask a hydrologist to do a report to determine where the water came from which damaged your property.
You should get legal advice about your insurance claim once the insurer has determined where they believe the damage came from.
Insurance contracts are complex documents. This section aims to explain some of the differences between insurance contracts and what to do if you have not received a copy of your insurance contract.
A 'standard cover' contract requires the insurer to pay for flood damage. If the written policy excludes damage caused by floodwater and this was not clearly explained, you can make a claim under the standard cover contract. Special rules apply where the insurer has failed to clearly inform you of the risks covered in your policy.
If the insurer failed to clearly explain or advise you that flood damage was excluded from your policy, you will have a 'standard cover' contract, which will cover a claim for flood damage. If you were not given a copy of the policy or if the wording is unclear or confusing, then a standard cover contract applies.
If you used a broker then the broker may be responsible for compensating you for the fact that you may not have the cover you expected. If you used a broker to take out or renew your insurance policy, seek legal advice.
If you were unaware your insurance policy did not include flood damage, you may still be able to make a claim through section 35 of the Insurance Contracts Act. Section 35 requires the insurer to clearly inform you of the restrictions and cover provided by the insurance policy before you enter into the contract. If the insurer does not do this, the penalty is that the contract will have effect according to law and this includes cover for flood.
The insurer has to prove standard cover does not apply. The standard cover provided by section 35 will apply unless the consumer was clearly informed and advised in writing of the risks covered and excluded (before the contract was entered into) or otherwise knew, or should reasonably have known, the risks covered by the contract.
The easiest way for the insurer to avoid standard cover is by:
The documents that may advise you that flood damage is excluded from your insurance coverage are:
It is important you check the documents you have been given by your insurer. A copy of your policy is available from your insurer. Standard cover does not apply if the policy clearly states the insurer will not pay for flood damage, even if you did not read the policy or you assumed flood damage was covered.
Standard cover applies if you were not given written information that stated flood cover was not included before entering into the contract, and you did not find out about the flood exclusion in any other way.
It is important to consider if any written information was provided before or after the contract was entered into. There are two situations where this might occur:
Usually, the policy will be entered into when the insurer accepts the consumer's offer (which often happens on the telephone). This happens after the insurer has disclosed to the consumer all relevant information about the insured risk. If the information about flood damage exclusion was only provided after this time, then standard cover will apply. If you paid the premium when at the insurer's or insurance broker's office and the policy was sent out in the mail afterwards, then you were not informed in writing at the time of entering the contract and standard cover will apply.
A new contract is entered into each year when your policy is renewed. If a policy has been sent to you in the mail and a year later the policy was renewed, standard cover would not apply. Written information about the flood exclusion would have been provided after the first policy, but before the renewal.
However, insurers sometimes change the policy wording at the time of renewal. These changes may further restrict the circumstances in which the insurer will pay. For example, your insurer may change its definition of rainwater damage, by saying it will now only pay for rainwater damage where the rainwater entered the house through a hole in the roof. If these changes were not made clear prior to renewal, then standard cover could apply.
The insurer is obliged under section 35 to clearly inform you of the risks covered in your policy, so even if you received written information, a standard cover claim may still be possible.
In Decision 97-5791, the consumer had made a claim under a home buildings policy. The consumer argued that a standard cover contract applied.
The panel saw the consumer had been provided with copies of the policy documents in 1991 and 1996. It decided the policy wording was clear and the policy had an index that made it easy to follow. The panel found the insurer had clearly informed the consumer of the restrictions under the policy and so standard cover did not apply. The insurer was able to reject the claim.
If standard cover applies, under the Insurance Contracts Regulations, the insurer must pay for loss from "storm, tempest, flood" for both building and contents insurance.
This can include:
The cause of the loss or damage depends on each case's individual circumstances. If the cause was flood damage, and this is excluded under your policy, then the insurer can refuse the claim.
There can be more than one cause of the damage, and if it was caused by combined rainwater and floodwater entering the house, then the insurer can still refuse to pay the claim.
Insurers usually obtain hydrologist reports to confirm if the damage was caused by rainwater or floodwater. These reports recreate the events and suggest the maximum level the water would have reached if it was only rainwater. These reports are not conclusive; they can be based on false assumptions and can be inconsistent with eyewitness events. If so, they may be challenged as incorrect.
Where your policy excludes liability for flood damage, it is necessary to establish the cause of any damage as there may not simply be one clear cause of the damage. Where something is a direct or immediate cause of the loss, it is referred to as a "proximate cause".
If your policy does not cover flood damage the insurer can refuse to pay the claim where rainwater and floodwater are both found to be proximate causes. The courts have said that where a loss is the result of two proximate causes, one of which is insured against (rainwater) and the second is excluded (floodwater), then the insurer is entitled to deny liability.
However, each case will depend on its facts. It may be possible to get the claim paid where rainwater was the proximate cause and the floodwater's effect was minimal or insignificant.
Proximate cause means the insurer can deny a claim when:
The principle of proximate cause is applied in the following ways:
The following principles apply to water damage:
Insurers often have reports from experts, such as hydrologists, to try and determine the origin of the water that caused the damage. These reports try to reconstruct ways in which water levels rose and the source and direction of water flow during the storm or cyclone's course. These reports are not without flaws as they may rely on incorrect assumptions or information.
Insurers may provide you with copies of these reports and you should read them carefully.
You may challenge the report if it is contradicted by eyewitness accounts, or if the report has incorrect assumptions about when or how the water reached particular areas, and the time and height that water levels peaked. However, even if these assumptions are shown to be incorrect, you must still show the damage was caused by the rainwater.
It is important to get legal advice.
The more detailed information you get about the deluge, the easier it is to establish the cause of the loss. You should try to gather the following evidence:
Floods tend to affect a large number of people in the same area. You could use this to your advantage and:
If you don’t agree with your insurer’s hydrologist you may need to obtain your own independent hydrologist’s report. These reports can be expensive so where possible communities should share this cost and share the information among themselves.
There are five main reasons for refusal of an insurance claim:
It is your job to show that the furniture, fittings or buildings covered by your insurance were in fact damaged at the time of the event (such as storm or cyclone). If an expert has provided an opinion that suggests your property was already damaged or in a poor state of repair, it will be necessary to provide competing evidence (possibly expert evidence) to contradict this. Legal advice will help you sort out what evidence would help your case. For more information read the “What if I had a defect in my home I was unaware of?” below.
You are under a duty to disclose relevant information when you take out your policy, or when you renew it. If you did not provide accurate or comprehensive information, your insurer may be able to reject your claim.
Some common examples of non-disclosure are:
There are two ways that you are required to disclose information:
You are not required to disclose:
The Insurance Contracts Act limits the circumstances in which your claim can be denied as a result of disclosure.
Your insurer has a duty to clearly inform you of the nature and effect of your duty to disclose. If they have not done this, they cannot rely on your non-disclosure to refuse a claim unless your non-disclosure was fraudulent. Renewal notices that you receive each year will normally inform you of your duty to disclose. If you fail to do so, the insurer may be entitled to refuse your claim.
If you failed to disclose something when the policy was taken out, or at renewal, your insurer cannot reject your claim unless it can show that it would have refused to provide you with insurance if it had known the missing information. If, for example, your insurer would have given you insurance cover had it known about your recent claims history, but would have charged a higher premium, then your insurer cannot reject your claim on the basis of the non-disclosure (although it can still require you to pay a higher premium). To find out if your insurer would have proceeded with the insurance, you should request a statutory declaration by the insurer’s underwriter. If one is not provided, you should complain to the AFCA who will require your insurer to prove it would not have provided you with insurance cover in the first place.
If you failed to notify your insurer of something that happened during the period of cover under the policy, your insurer can only rely on your non-disclosure to refuse or reduce your claim if it can demonstrate that it has been prejudiced by your non-disclosure.
It is the responsibility of your insurer to prove that a nondisclosure allows the insurer to reduce or deny your claim.
So, if your claim has been refused on the basis of non-disclosure then you need to:
If you believe that your claim has been improperly refused you may:
When you arrange an insurance policy over the phone, the call is often recorded. Your insurance company will therefore often have very good evidence about what was said at the time. Your insurer is required to send your policy information to you in writing within 14 days. Your policy information will usually contain a summary of what you have disclosed for you to check and correct if necessary.
Insurance contracts often contain conditions and exclusion clauses.
Examples of conditions include:
You need to check your policy to find out what the applicable conditions are.
Your insurer may refuse your claim if you have failed to comply with a condition. However, section 54 of the Insurance Contracts Act states that the insurer cannot refuse to pay a claim because of some act or omission, but they can reduce the amount paid to you to the extent their interests have been prejudiced by your actions or inactions. For example, if you have failed to install keyed locks on all windows and a thief enters your premises by smashing a window, or knocking down the front door, you may be able to argue that your failure to install or maintain the window locks has not prejudiced your insurer because it did not contribute to the loss or damage suffered as a result of the break in.
Most insurance policies also contain exclusions. An exclusion is a situation or event that is NOT covered by the policy. Some examples of events that may be excluded are:
Some of the more common exclusions are discussed below.
To rely on an exclusion clause the insurer has to prove on the balance of probabilities that the exclusion clause applies. In some cases your insurer may also have an obligation to bring the exclusion clearly to your attention, although this does not need to be done in person. It would usually be sufficient to include this information in the documentation sent to you when you took out the policy.
If you were discouraged to put in your claim because your insurer says that your damage was caused by flood and flood is not covered by your policy then you should lodge a claim anyway. This is because your insurer may not be correct.
If your claim is rejected because your insurer says it was caused by flood then you need to get legal advice because:
For more information read the “My home and contents have been damaged by water — what do I need to know?” section of this guide.
Insurers sometimes deny claims because they say that the damage was caused by a pre-existing defect in the property (for example, that the roof let water in because it was poorly constructed). Section 46 of the Insurance Contracts Act provides you with an argument against this. Section 46 states that if you were unaware of the defect when you entered the insurance contract (and a reasonable person in the circumstances would not have been aware of it) then the insurer cannot refuse the claim.
Wear and tear/damage over time
The insurance policy will often exclude “wear and tear” and damage caused by failure to maintain the home. For example, a storm may blow tiles off your roof. The insurer may refuse to pay the claim if your house was old and the tiles needed replacement anyway because of their age. Insurance policies are not a substitute for failing to maintain your home.
If your insurer rejects a claim because of wear and tear then you need to try to get:
To establish fraud your insurer needs to prove that you intended to deceive the insurer or acted with reckless indifference as to whether or not your insurer was deceived.
If fraud is established by your insurer then it can reject your insurance claim and void your policy. This means you no longer have insurance cover. In serious cases, the matter may be referred to the police for investigation and you may be charged with a criminal offence.
Your insurer cannot rely on rejecting your claim on the grounds of fraud if the fraud was minor and it would be unfair for your insurer to reject the claim.
Insurers are always on the lookout for fraud. To avoid being investigated:
If you are being investigated for fraud, get legal advice immediately.
If you are being investigated by your insurer, some tips include:
Insurers sometimes cancel insurance policies in the middle of the period of insurance cover. This may be done in response to additional information provided by you that increases your insurer’s risk to an unacceptable level. Another very common reason is that you have failed to pay the premium for the policy. This is particularly likely if you have opted to pay your premium in instalments via direct debit and your direct debit has failed.
If your insurer tells you that your policy has been cancelled, you should get advice about whether they had sufficient reason to cancel the policy and whether they took appropriate steps to inform you of the cancellation in accordance with their legal obligations. If you wish to dispute their decision to cancel the policy, or argue that they have not properly notified you of the cancellation, you can make a complaint to the AFCA.
If the insurer has refused your claim this refusal must be in writing. If the insurer telephones you and tells you your claim has been refused, ask them to put it in writing.
Your options once your insurance claim has been refused are to:
If English is your second language you should use an interpreter to assist with completing any further response to your insurer.
Remember that the insurance policy is a contract and the refusal of the claim is a legal dispute.
If your claim is rejected we recommend that you ask your insurer to internally review the decision straight away.
If your claim is rejected, the insurer must give you access to an internal and an external dispute resolution process. You must try to resolve a complaint through the insurer's internal review process before approaching the external scheme - the AFCA. While the structure of the internal dispute resolution process varies with each insurer, it usually means the decision is reviewed by someone at a more senior level. This can be useful in two ways:
You can get contact details for each insurer's internal dispute scheme from AFCA. The insurer is allowed to take a maximum of 30 days for the internal review of any decision (or failure to make a decision) under the General Insurance Code of Practice, but if the matter is urgent, this time should be shortened.
If your claim has still been denied after an internal review, the next step is to complain to the AFCA as soon as you can. AFCA can only hear complaints about insurers that are AFCA members.
The advantages of AFCA are:
The scheme's disadvantages are:
AFCA has terms of reference that state which cases it can hear. These can be altered from time to time. For a copy of the terms of reference, contact AFCA or visit: www.afca.org.au.
Where the claim is for $1,085,000 (or less), AFCA can make a final decision that is binding on the insurer about:
AFCA may consider a dispute outside the terms of reference if the insurer agrees. You should approach the insurer about a claim outside the terms of reference to see if they will agree to the panel hearing it.
The maximum compensation AFCA can award is $542,500.
When AFCA receives a complaint, it will write to the insurer asking it to provide a written response. The insurer can insist its written submission is confidential. However, AFCA will encourage the insurer to provide you with copies of the reports from its hydrologist, if this has not been done.
AFCA will try to resolve the dispute by mutual agreement. If a dispute cannot be resolved by mutual agreement, AFCA conducts a detailed investigation and may offer an initial view on the merits of the dispute if it is likely to assist the parties to reach a resolution.
In most instances AFCA issues a recommendation. If a recommendation is not accepted by either party, a determination can be made.
Determinations are often made by a panel. The panel consists of three people:
Generally, the panel's decision is based on written submissions and reviewing documents, rather than interviews with the people involved. In flood cases, the panel may visit the storm scene, inspect the area and speak to the people involved.
Like all decision makers at AFCA, the panel must make its decision based on what is fair and reasonable in all the circumstances, and in line with good insurance practice, the policy terms and established legal principles. This is broader than the issues a court would consider.
The panel's decision is binding on the insurer. However, you can choose whether to accept the decision. If your claim is still refused by the panel, you can reject the panel's finding and take the insurer to court.
Your written submission should include:
Your policy may also say you need to let your insurer know about the damage as soon as possible. It may be a basis for refusing your claim, so don't delay.
If your property insurance claim resulted from a catastrophe or a disaster, you have 12 months from finalisation of your claim (if finalised within one month of the disaster) to ask for a review of your claim (clause 90 General Insurance Code of Practice).
If your insurer refuses to assess your claim because you cannot pay the excess, you should ask for an internal review and external review (if necessary). You may be able to argue that, under section 54 of the Insurance Contract Act, insurers cannot rightfully refuse your claim simply because you cannot afford to pay the excess in a lump sum.
If the review is refused or partially rejected then you can complain about this to the insurer's Internal Dispute Resolution department.
The General Insurance Code of Practice states insurers will respond to your request for internal review within 30 business days if they receive all necessary information and have completed any investigation required.
Each insurer designates senior officers to look at claims in an internal review and to make a final decision about the complaint.
If your insurer is not complying with their code obligations, you can contact the General Insurance Code Compliance Committee.
Your time limit for lodging a complaint with AFCA will expire on the earliest of:
If AFCA receives a complaint that has not been through the internal review, they will ask you to go back to the insurer for internal review. The insurer will then make a final decision that can be taken back to AFCA within two years.
AFCA generally will not grant the right to lodge a dispute outside this time frame without the agreement of the insurer. When you lodge your complaint (AFCA calls this a "dispute"), you will be asked to fill in a form called a "notice of referral". You must complete and return this form by the date specified or you may lose your right to complain to AFCA. It is worth putting in a late complaint with reasons for the delay. Seeking legal advice about what to say is recommended.
Once AFCA has received a complaint (called "lodging a dispute"), a decision is likely to be made within three to six months but could take longer.
If your matter is unsuccessful at AFCA, you can still take it 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' - eg storm or flood - depending on what your policy says).
If AFCA's decision maker finds in your favour, it can make a decision ordering the insurer to pay:
AFCA's decision makers have the power to order the insurer to pay legal costs (in very limited circumstances) or expenses - such as hydrologist reports - where it is appropriate to do so.
AFCA has limited power to order the insurer to pay damages.
While AFCA is designed for people who do not have lawyers, some flood insurance cases are difficult and may need help from a lawyer.
Legal Aid Queensland can provide advice and some assistance for disputes with insurers. You can call Legal Aid Queensland on 1300 65 11 88.
Sometimes an insurer will pay part of the claim, but will ask you to sign a document releasing the insurer from any further liability. This is so you agree not to pursue any claims for further loss. The document is often called a Deed of release or a Release agreement. If your insurer asks you to sign a release, you should read it very carefully and make sure you are satisfied with the agreement before signing it. You should get legal advice before signing any legal document.
Depending on the circumstances in which you signed the release, you may still be able to pursue further claims under the policy. This would particularly be the case where the document was signed:
This guide does not offer specialist advice about repairs. However, remember:
The building policy will be for a “sum insured” (the specific dollar amount you are insured for) or replacement of the building.
Most policies are for sum insured. If your policy is sum insured, usually you will only get the amount of money stated as the sum insured amount. However, some policies include other cover for items such as emergency housing, cleaning or clearing up a site, or professional fees for architects, etc. Ask your insurer about what other cover is provided.
If your policy is for replacement of the building, the policy will let the insurer choose between paying for a replacement building or giving a cash payout. The cash payout must cover the full cost of replacement so long as there are no improvements in quality or standards in the new building. You should be able to recover the full cost of rebuilding your property to the same standard as before the disaster. If the insurer gives you a cash payout but this is not enough to cover the cost of rebuilding, the insurer needs to reassess your claim. You should read carefully the cash settlement factsheet that insurers are required to provide. You need to ask for a review within certain time limits — ask your insurer about how much time you have.
You may be able to choose either option but think carefully about each one. If you choose the rebuild option, this means you have the money to rebuild when you are ready. If you choose a lump sum payment, this can take care of financial issues you face now but you could easily spend the money and then have less money later. If you accept a lump sum payment some policies also take away certain benefits, such as the cost of removing debris or cost of permits. The insurer does not guarantee the quality of repairs that you organise. Check your policy carefully and talk to your insurer about this.
If your policy was for a sum insured amount, the insurer will not cover extra costs such as changes to planning laws unless there was a specific additional cover in the policy. In this case, your insurer will only repair or replace your house to the condition it was in before the floods. You may have cover for the new building code costs if your policy cover was to replace your house “as new” or with a replacement benefit. Most policies do include extra amounts for changes to the planning laws. Check with your insurer.
Fencing replacement will depend upon the type and location of your policy (for example, is it for a business, home or farm?). You need to check the policy to see if fences are included in the cover. This may not include full costs of replacement. You should have debris removal and demolition included in your insurance policy but sometimes this is an extra benefit. Check your policy.
After a natural disaster the government and councils may offer help for fencing and debris removal, clean-up and demolition. Check with your local council whether this help is available. If the cost of clean-up and debris removal is included in your insurance policy, you should still think about using the government’s free debris removal service. You may be able to use your policy entitlements to cover other losses.
If a property is owned by two or more people and all part owners are named in the insurance policy, each person is entitled to get part of the insurance payout. The payout amount depends upon the interest each person has in the property. If the property is jointly owned, each person is entitled to get the full amount of the claim under the policy. If the property is owned by each person as tenants in common, the payout amount will reflect the interest each person has in the property. Usually, an insurer will deal with all the people named in a policy at the one time. However, if one person is given the payout, then that amount is held “in trust” for the other people named in the insurance policy. If you are named in a policy and are having trouble getting a payout which has been given to another person, get legal advice.
If you own a property with another person but your name is not on the insurance policy, the insurer can give the full payout to the person named in the policy. Get legal advice quickly if this applies to you.
Yes. If you made a claim because of disaster and you think the assessment of your loss was wrong or incomplete, you can ask for a review.
If you cannot afford the costs to rebuild, and the sum insured was decided by your insurer, mortgage company or other financial institution, you may have a case for complaint against that institution for giving you inappropriate advice. Get legal advice about this. You may also be able to get financial help from the government. This may cover the difference between the replacement cost of your home and the sum you were insured for.
Usually, if your policy has not been renewed or you have not paid the premium, you will not be able to make a claim. Your insurer must let you know in writing that your policy is about to finish (lapse) at least 14 days before it does. If your insurer did not do this, and you did not renew your policy, the policy will go on as if you had renewed the policy for the period of the original policy.
If your policy has lapsed recently and you have been a longterm customer of the insurer, you can ask that your insurance be continued for special reasons. This might include if you had the policy in place for many years and you had reasons that made you forget to renew your policy. Usually, however, you are not able to make a claim.
If you choose a replacement policy, this will cover the cost to rebuild. You will not be underinsured if you were to lose your house in a future disaster. If you choose a “sum insured” or “sum insured and replacement/additional amount” policy for a specific amount of money, this may not be enough to cover rebuilding if you were to lose your house again.
Most people who have worked are members of a superannuation fund. Most superannuation funds allow people to obtain early access to their superannuation in certain circumstances including financial hardship, compassionate grounds or permanent incapacity. If you are struggling financially, it may be worthwhile talking to your superannuation fund to check your options.
Most superannuation funds also provide life or disability insurance cover. If a person has passed away or been seriously injured in the floods there are often generous insurance lump sums that can be claimed. You should get legal advice regarding your entitlements before making any decisions.
In many cases you may still get the government's financial help even if you have already received an insurance payout. Your insurer may reduce your payout to reflect the amount that the government has paid you but some insurers will give payouts even if you received or can get government help. In some cases, if you get government help for a particular loss, your insurance coverage could be used for other losses. Speak with your insurer about these matters.
Many insurance policies include extra benefits on top of the sum insured. These benefits are for emergency accommodation, professional fees (eg for architects), compliance costs (eg changes to planning laws), and debris removal and clean-up. These benefits will be on top of your sum insured and may apply even if you do not get the full sum insured for your claim.
Where the policy was arranged by an insurance broker (rather than you dealing directly with the insurer), other issues (apart from those already dealt with in this guide) may arise. If the loss was due to some negligent conduct on the broker's part, you may be able to pursue a claim against them.
Examples include where you:
You can take complaints about insurance brokers to the AFCA, an alternative dispute resolution service which you can access for free.
Do not photocopy the sample letter and send it. Use the letter as a guide and include information relevant to your own situation.
Sample 1: Can’t pay excess(PDF, 36KB)
Sample 2: Delay(PDF, 34KB)
Sample 3: Complaint to Insurance Code Compliance(PDF, 35KB)
Sample 4: Australian Financial Complaints Authority(PDF, 38KB)
See the office details on the back of this guide, visit www.legalaid.qld.gov.au or call us on 1300 65 11 88.
PO Box 538, Surry Hills NSW 2010
National Toll Free: 1300 663 464
GPO Box 3, Melbourne Victoria 3001
Phone: 1800 931 678
PO Box R1832 Royal Exchange Sydney, NSW 1225
Phone: (02) 9253 5100
Fax: (02) 9253 5111
Toll Free: 1300 728 228
Level 18, 111 Pacific Highway, North Sydney NSW 2060
Phone: (02) 9964 9400
Fax: (02) 9964 9332
Department of Justice and Attorney-General
GPO Box 3111 Brisbane QLD 4001
Phone: 13 74 68
Last updated 13 July 2022