Insurers who refuse flood claims may be subject to legal action unless they can prove they advised policyholders that flood coverage was excluded, a lawyer’s group says.

The Australian Lawyers Alliance (ALA) says some companies may be in breach of the Insurance Contracts Act.

Similar advice has been published in the latest issue of Insurance News (the magazine), with Gold Seal Senior Solicitor Kate Stewart providing a detailed examination of the legal challenges insurers who declined flood insurance could be exposed to.

The ALA says insurance contracts with homeowners – as opposed to businesses or investors – “are required to provide prescribed coverage under section 35 of the Insurance Contracts Act, as interpreted by Regulation 10 of the Insurance Contracts Regulations”.

ALA Queensland President Adam Tayler says “prescribed coverage” includes flood.

“If an insurer does not provide that coverage under a contract and they want to avoid paying they must prove that, prior to the contract being entered into, the homeowner was advised that the policy did not include coverage for flood.”

Mr Tayler says that in this case, it does not matter if the flooding was storm or riverine flooding.

The ALA will hold legal clinics in Queensland’s flood-affected areas to ensure consumers are informed of their legal options. The first is planned for Rockhampton.