In recent weeks we have all witnessed the devastating impact that floods have had on our communities. We have received a number of calls from concerned Owners Corporation Managers and their clients about the cover afforded by their policies. We hope the following information may assist you with any concerns that you may have.
Flood is not standard cover
Strata Insurance policies do provide storm cover but do not provide flood cover. Flood cover may be requested by Owners Corporations and Insurers will assess their willingness to offer flood based on the location of property and the proximity of water ways as defined. This extension of cover, if granted, would attract an additional premium.
What is a Flood?
Unfortunately each insurer has their own definition of what constitutes a flood. You should refer to the applicable Product Disclosure Statement for a full definition and your policy wording. Here is a selection of Insurer’s definitions of flood.
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AXIS |
Flood means: the inundation of normally dry land by water escaping or being released from the normal confines of: a) a canal b) a dam c) a natural water course or lake (whether or not altered or modified) or d) a reservoir. Commercial Strata Policy Wording or Axis Policy – Strata – V11-10 |
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ALLIANZ |
Flood means the inundation of normally dry land by water overflowing from the normal confines of any natural watercourse or lake whether or not altered or modified in of any reservoir, canal or dam. POL107BA/ F1/0104 |
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CHU |
Flood means when water that is normally contained in a water catchment system increases because of rainfall or snow melt(whether in the immediate region or elsewhere) or is deliberately released by an authority, and the water overflows onto land that is not normally covered by water. Version 102520-11/07 |
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CHUBB |
Flood means the inundation of normally dry land by water escaping or released from the normal confines of any natural watercourses or lake (whether or not altered or modified), or of any reservoir, canal or dam. OCE-2-010909 |
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SUU |
Flood means when water from a river, creek, lake, swamp, watercourse, reservoir, dam or navigable canal (whether they are in their original state or have been modified) overflows onto normally dry land. Water that escapes from an irrigation canal is not flood. We also regard rainwater on your property: a) that cannot run off into a river, creek, lake, swamp, watercourse, reservoir, dam or navigable canal (whether they are in their original state or have been modified) because it is overflowing in flood; and/or b) that mixes with the floodwater coming from the river, creek, lake, swamp, watercourse, reservoir, dam or navigable canal (whether they are in their original state or have been modified) as water coming from a flood. Strata-r 04 09 |
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ZURICH |
Flood means the covering of normally dry land with water released or that has escaped from the normal confines of: a) any watercourse whether natural or altered b) any lake whether natural or altered c) any reservoir, canal or dam. ZU06975 – PCUS – 000010 – 2006 |
Insurers have set up dedicated teams to respond to enquiries, and in many instances your Owners Corporation clients will not be required to complete standard Claim Forms. In each and every circumstance however, you should contact the insurance company via our office before your clients remove any damaged contents from properties or start repairs.
If your client’s inquiry is denied by the insurance company, the Insurer will provide you with formal documentation explaining how the decision was reached.
Owners Corporations can have the decision reviewed through the Insurers Internal Dispute Resolution process if you are not satisfied with the decision and the reasons provided.
Damage to Owners Corporations as a result of rain and storm events are covered by Strata Insurance policies. If there is a question on how the water entered the property, insurers may appoint an assessor to assist in their investigations.
Flood Embargos and New Business
Also at this time we have been informed by insurers that embargoes have been placed on certain postcodes in flood affected areas. Insurers amend the postcode embargoes as the threat of flood moves from one area to another. These embargos mean that insurers are not willing to accept any new business or policy alterations on properties in flood affected regions.
As an Owners Corporation Manager, you should continue to request quotes for new business and we will forward them directly to the insurer for their consideration. If an insurer does decide to provide terms, the quote is only indicative and valid at the time it is provided. If you accept the quote, we will need to reconfirm with the insurer that the terms are still valid and an embargo has not been placed on the region.
If you are unsure of how to advise your clients on the area of flood, please contact our office on 1300 424 627 and we will be more than happy to assist.
This insight article is not intended to be personal advice and you should not rely on it as a substitute for any form of personal advice. Please contact Whitbread Associates Pty Ltd ABN 69 005 490 228 Licence Number: 229092 trading as Whitbread Insurance Brokers for further information or refer to our website.
