A leading insurer says it’s time the industry took the initiative on flood insurance, rather than letting lawyers set the agenda.

“For this industry to allow lawyers to be on the front foot over this issue is stupid – we have lost the plot,” Zurich Financial Services Australia CEO David Smith told insuranceNEWS.com.au.

“We do all the work on bushfires and hailstorms, then we argue about whether damage is from storm or flood.”

Leading plaintiff law firm Slater & Gordon last week advised Victorians to check if their insurance companies will cover home and contents damage from the state’s floods.

Earlier this year the law firm won a case against Elders Insurance over a dispute about storm damage to a home in Gunnedah, Queensland. The insurer unsuccessfully argued that the damage was due to causes other than excess rainwater.

Slater & Gordon lawyer Peter Long says the firm is working on a number of other cases in Queensland against insurers. The cases argue water inundation of properties in March was storm damage, not flood damage.

Mr Smith – whose company covers commercial properties – says it’s time for all insurers to cover flood damage.

“I think these actions by lawyers reinforce the problem that vexes the industry – what is storm damage and what is flood damage,” he said.

“Currently the industry says if there are not too many claims we will call it storm damage, but when we refuse to cover flood damage it is a reputational risk for the industry.”

Mr Smith says all insurers could cover the risk of flood damage in the premium and consumers then have the choice of whether they wish to take out the extra cover.

Mr Long said there have been reports from residents in areas such as Creswick, Clunes and Beaufort that their insurers would not pay for flood damage.

“Time and time again I have seen insurance companies ducking for cover when it comes to paying out on insurance policies, while at the same time they have been happy to take people’s premiums,” he said.

“Unfortunately, some insurance companies refuse to pay for damage caused to homes, sheds or their contents when rainwater sweeps through properties during intense rainfall.”