Flood cover can be challenging for north Queensland businesses to obtain and brokers to place, the National Insurance Brokers Association (NIBA) says.

NIBA CEO Dallas Booth today highlighted the “supply issue” following a visit to flood-ravaged Townsville, where claims have spiralled to $887 million after unprecedented rainfall.

As previously reported by insuranceNEWS.com.au, politicians have sought to ramp up pressure on insurers after it emerged that significant numbers of Townsville businesses don’t have flood cover in place.

While all policies generally include storm cover, commercial policies do not necessarily include flood cover.

Mr Booth, who travelled to Townsville to meet the owners of affected businesses, says “the majority” did not have flood cover and that most made the decision on cost.

But he told insuranceNEWS.com.au there is “a supply issue” and that “cover is not readily available”.

“It is available but it is not included as a matter of course, and it is strictly underwritten. It is not always provided when requested.

“Invariably brokers did talk to clients about flood cover and did recommend flood cover.”

Damaged premises that don’t have flood cover will be individually assessed by insurers and hydrologists to ascertain if they have a storm damage claim. It is not yet known how many claims will be declined.

The standard wording defines flood as “the covering of normally dry land by water that has escaped or been released from the normal confines of any lake, river, creek or natural watercourse, whether or not altered or modified, or any reservoir, canal or dam”.

Mr Booth emphasised that his comments are not a criticism of insurers.

“The challenge for insurers is the same challenge they face with residential strata [in the region] – it is called weather.

“Townsville has had a massive amount of water, and there are people from the insurance industry everywhere responding to the needs of the community.”

He says the flooded city illustrates again the need for “proper planning, proper mitigation and inbuilt resilience. We have to be much smarter in the way we build and manage communities to keep down the cost of claims.”

The Insurance Council of Australia (ICA) says 21,515 claims have been lodged so far.

“All claims lodged are being assessed on a case-by-case basis, taking into account the damage sustained and the terms and conditions of individual insurance policies,” CEO Rob Whelan said.

ICA is hosting two forums – on Monday (Feb 25) and March 25 – for affected householders and business owners. The forums will cover key aspects of the recovery process, including claims management and rebuilding.

Registration is essential. Go to www.disasters.org.au/fnq-forums or call 1800 734 621.