Treasury proposes single definition of flood cover
Treasury has proposed a standard definition of flood cover across the insurance industry.
The Queensland floods revealed the extent to which people were not covered for certain types of flooding or water damage. Treasury noted that the insurance industry took different approaches to coverage, and that recent natural disasters highlighted a lack of consumer understanding about insurance policies.
Assistant Treasurer Bill Shorten said some policies used terms like ‘accidental flood’ or ‘flash flooding’ to describe what was covered, yet excluded cover where a flood was caused by a river bursting its banks. As such, the Treasury’s Reforming Flood Insurance: Clearing the Waters consultation paper has proposed a standard definition of flood cover as well as the requirement that short, simple, key facts summaries for insurance policies be made available to consumers. Shorten said that clearer definitions would mean consumers understood what they were covered for, while the single page key facts statement would allow consumers to see at a glance what was covered and what was not.
“If you have an insurance policy, you should be able to tell, at a glance, what that insurance policy covers you for. And yet, as we’ve seen all too often after the recent floods, that simply isn’t the case for many Australians,” said Shorten.
A standard definition for floods, across the country and across the insurance industry, was the best way forward, he said.
The consultation paper has proposed that the term ‘flood’ be defined as the covering of normally dry land by water that has escaped or been released from the normal confines of any lake, or any river, creek or other natural watercourse, whether or not altered or modified; or any reservoir, canal or dam.
The paper noted that storm water runoff was typically included in standard cover for home and contents policies, and Shorten emphasised that this would remain the case.
Recommended for you
A quarter of advisers who commenced on the FAR within the last two years have already switched licensees or practices, adding validity to practice owners’ professional year (PY) concerns.
Integrated wealth and financial services group Rethink has launched a financial planning arm called Rethink Wealth to expand beyond property investing and into holistic wealth management.
While adviser numbers continue to slowly creep back up, the latest Wealth Data analysis reveals they would actually be in the green for the calendar year if it weren’t for so many losses in the limited advice space.
Iress has appointed a chief AI officer to spearhead the fintech’s strategic focus on AI, with chief executive Marcus Price describing how the technology opens the doors to a “new frontier for wealth advice”.
