Insurance lawyers say the Insurance Council of Australia’s (ICA) standard flood definition could cause more problems than it will fix.

Australian Insurance Law Association (AILA) President Chris Rodd, who is also CGU’s Dispute Resolution Manager, told a seminar in Melbourne last week a standard industry definition is needed but more work needs to go into the wording.

“We either need a very simple definition, or, if we are going to go down this route, explain everything in depth,” he said.

Financial Ombudsman Service Insurance Division Panel Chairman Peter Hardham says the ICA’s definition leaves “a great deal of scope for creativity”.

His comments echo concern from the National Insurance Brokers Association (NIBA) and the Australian Securities and Investments Commission (ASIC) that the ICA standard definition could restrict rather than extend the availability of flood coverage in Australia.

“I have never seen a definition of flood like the ICA’s,” Mr Hardham said. “It is unique. There are no conditions attached to the definition. It concerns me as I might ultimately have to rule on it.”

The definition has been tentatively and conditionally approved by the Australian Competition and Consumer Commission (ACCC).

ICA did not reply in time for publication to an insuranceNEWS.com.au request for comment.