The Financial Ombudsman Service’s (FOS) ruling that RACQ Insurance must pay out to a Queensland couple whose house was ruined by the floods of January last year does not set a legal precedent, according to the Insurance Council of Australia (ICA).

Les and Lois Cameron of Goodna, south of Brisbane, fought an 18-month battle through Legal Aid after RACQ refused to pay on their claim, saying the damage was caused by riverine flooding and was therefore not covered by their policy.

Following the FOS decision that flash-flooding was responsible, Ipswich councillor Paul Tully said the couple are likely to receive a payout of up to $100,000 and “the decision offers fresh hope for flood victims who may be able to use this decision as a test case”.

But an ICA spokesman says the decision “in no way sets a legal precedent” and has urged Cr Tully “not to offer false hope to flood victims, many of whom have already been through the dispute resolution process after the heartbreak of the Queensland floods”.

FOS Lead Ombudsman John Price concurs. “Each dispute that comes before FOS is unique and the resolution of any dispute depends on the particular facts involved, including the location, topography, time of inundation and policy wording”, he told insuranceNEWS.com.au.

“In reaching a determination, the ombudsman will look at all available information provided by the parties and in many circumstances will conduct site visits to review the damage first hand.”

RACQ Communications Manager Mike Sopinski says FOS “has stated it will deal with each claim on a case-by-case basis and this decision does not set a blanket precedent”.

Mr Price says FOS has received 1133 disputes relating the January 2011 floods, 325 of which are yet to be resolved.

“Of those disputes closed, approximately 40% were found in favour of the consumer and 60% in favour of the insurer,” he said.

ICA says insurers are paying out nearly $2.4 billion on 58,685 claims for the floods, with less than 1% going to FOS.

It says it is pleased the Federal Government has introduced a standard definition for flood in policies, which “provides greater certainty to consumers”.