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Townsville claims rise as coverage rows rumble on

The number of claims lodged after the devastating Townsville floods in February has risen to 27,355, amounting to more than $1.13 billion.

About 214 claims have been denied, with 260 sent to internal dispute resolution and 25 in external dispute resolution. But 19,900 claims are still open.

Channel Nine’s A Current Affair last week reported on flood victims which it said are “battling” insurers for payouts. As insuranceNEWS.com.au has previously reported, many businesses and strata residents did not have flood cover.

The show features businessman Mike Adlard, who says QBE won’t pay because he didn’t have flood cover.

And Lee Lane and Joanne Chambers, who own units in the same Townsville complex, say Vero told them their body corporate does not have flood insurance, leaving them with no compensation for damage to their homes.

Insurance Council of Australia spokesman Campbell Fuller says the case studies don’t reflect the true situation. So far $230 million has been paid out for repairs, services, emergency accommodation and replacement items, and 25% of critical home building claims have already been resolved.

“We are aware that A Current Affair spent a long time trying to find bad case studies,” Mr Fuller said.

The program features claims adviser David Keane, who has been holding meetings in Townsville for unhappy insureds. He told insuranceNEWS.com.au he is assisting about 70 people with claims, and giving advice to hundreds more.

He accepts people without flood cover cannot expect to be paid for flood damage, but says “it’s not always that simple”. Some homes were damaged by stormwater before being inundated for a second time by floodwater after the Ross River Dam was opened.

ICA says insurers use hydrologists to determine the cause of damage, and some claims may be part-paid.

But Mr Keane says the quality of hydrology reports has been “variable” and he has examples of hydrologists determining all damage was due to flood, despite photographic evidence of stormwater in the property.

And he says blaming the client for failing to arrange flood cover is not always fair.

“Most strata residents did not know that they were not covered for flood. They were not asked about it. Somewhere the chain of communication has failed. Something is broken.”

QBE declined to comment to Channel Nine, citing privacy, but Vero says it has approached claims “with fairness and compassion”.

“Commercial customers, including strata management, typically need to ‘opt in’ to flood cover,” it said.

Vero says strata claims “can be complex” due to building cover being taken out by the body corporate, not the resident.

“In relation to strata claims, a significant proportion of claims on broker-sourced policies appear to have been caused by flood damage. However, we still expect to accept more than half of the claims we have received.”