In the wake of recent flooding in southern Queensland, the definition of flood versus storm damage and what exactly is covered is once again receiving media attention.

But with flood cover now available through several insurers – albeit at a cost – policyholders in flood-prone areas must be willing to take fair responsibility for ensuring they have the type and level of cover suitable for their circumstances.

Since mid-2008 Suncorp/GIO Insurance has provided automatic flood cover on all personal lines, which the company says allows it to focus on processing claims rather than working out what caused the damage.

GIO spokesman Mike Sopinski says the company invested significant resources in compiling a comprehensive 3D map of Australia from which it is able to accurately assess the flood risk of each property.

Other insurers, such as Allianz and CGU, provide cover for storm damage but exclude flood from their home and contents policies.

This means these companies have to commission independent hydrologists’ reports for each property to determine the type of water damage sustained and whether it is from a storm or flood.

This takes additional resources and, in the case of recent flooding in southern Queensland, often draws criticism from communities and individuals who dispute the findings.

The Consumer Action Law Centre says one of the main problems in cases of flood and storm damage is that consumers don’t realise the significance of small differences between insurance policies and the protection they provide.

Nicole Rich, Director Policy and Campaigns at the centre, says it’s “ really important” that consumers understand there are differences between policies and that they should shop around.

“If you want flood cover you should look for it, because you can buy it.”

That’s not so easy, however. “It’s often quite technical, and I think insurance companies could do a better job of making it a lot clearer to people what is and isn’t covered.”

It would also help, she says, to have a “fair, common” definition of flood that was used across all insurance policies rather than it being up to each insurance company to define.

As the Insurance Council of Australia discovered two years ago when it tried to devise a common flood definition, getting everyone to agree on something simple and clear, as well as fair to all parties, is difficult if not impossible.

Allianz Australia GM Corporate Affairs Nicholas Scofield says the issue shouldn’t revolve around a clearer definition as much as it should around policyholders taking responsibility for ensuring they have the cover they want.

“People have to take responsibility for the fact that they are given an insurance policy, the terms of which are set out quite clearly in plain and simple language,” he told insuranceNEWS.com.au.

“Talk about fine print is just a myth – all the print is in the same-sized font and it is very clear what you are covered for and what you are not.”

With flood cover on the market, he believes one of the main issues now is ensuring that people living in areas of very high flood risk who would find private cover prohibitively expensive are able to access an alternative.

“Essentially governments have to play a part in facilitating the delivery of flood insurance to people who are located in areas where their vulnerability is such that the private market won’t make it available,” he said.

It’s not too often that an insurance spokesman and a consumer advocate will see eye to eye, but on this point Nicole Rich agrees with Mr Scofield. She says governments should have emergency flood management plans, including better mapping of areas at risk of flooding and tighter restrictions on building permits.

The debate over flood versus storm has been going on for many years. And as the floods at present affecting the NZ tourist centre of Queenstown illustrate, sometimes individuals and businesses have to accept that being flood-prone makes insurance unaffordable.

The solution is to pay very high premiums commensurate with the risk or – as some businesses in flood-prone Queenstown have decided – mitigate the risk by building in a way that minimises the damage.

There are choices, and now that flood insurance is commonly available in most areas the responsibility of choosing appropriate cover remains one for the insurance-buyer, not the insurer.