The newly formed Association of Insurance Building and Engineering Consultants has told the floods inquiry that a set of insurance industry and expert-agreed terms and definitions are needed to improve claims processes.

The group says terminology that needs clarity to describe loss or damage to a building without ambiguity or misinterpretation includes proximate cause, wear and tear, maintenance, deterioration, building movement, ground movement, settlement, subsidence, rot, “gradual” and “progressive”. 

A submission by the group supports “a regulated, comprehensive training level and expectation, including minimum qualification requirements for all experts involved in reporting within the insurance industry” to ensure code of practice requirements are met.  

The federal parliamentary inquiry into the record-breaking 2022 floods has received more than 60 submissions so far and has held hearings on 19 days, including in regional areas of Queensland, NSW and Victoria that were hit by the catastrophes. 

Problems with expert reports have been raised during the hearings and in submissions. 

The General Insurance Code Governance Committee, drawing on its own inquiries, said it found that expert evidence relied upon by insurers to deny claims was of poor quality, and it had seen instances of neighbouring properties with the same type of cover from the same insurer receiving different claim outcomes. 

The Association of Insurance Building and Engineering Consultants was formed last month to provide a professional body for building and engineering consultants working with insurance claims and to address concerns over a lack of consistency, professionalism and quality in expert reports. 

The submission introducing the organisation to the floods inquiry supports a “collaborative and consultative process” towards improvement. 

The association supports ongoing training encompassing the code of practice, scopes of work and dealing with vulnerable consumers and mental health, as outlined by the Insurance Council of Australia. 

The group also says specific insurance training – particularly with the Australian Financial Complaints Authority and its publicised common issues and complaint types around expert reports – will improve the assessment of proximate causes of damage in general insurance claims. 

Former Australasian Institute of Chartered Loss Adjusters CEO Tony Libke has been appointed the group’s inaugural CEO.

From Insurance News magazine: After rolling catastrophes and amid intense scrutiny from authorities, how can insurers get it right next time disaster strikes?