Zurich launches automatic flood cover
Zurich Financial Services Australia is the nation’s first insurer to offer automatic flood cover in its commercial insurance policies.
The insurer confirmed last week that automatic flood cover will be included in the base wording of commercial insurance policies from 4pm on September 8.
CEO David Smith originally flagged his intention to provide the cover late last year. Last week he told insuranceNEWS.com.au he believes including flood cover in commercial policies is “the right thing to do”.
“We’ve tried to take the ambiguity away from what’s covered and what isn’t,” he said. “Currently a lot of coverage is arbitrary – it’s discretionary and depends on a particular event. That doesn’t serve the industry very well.”
Mr Smith says the Zurich policy goes further than current market practice. “In a lot of cases insurers try to classify many claims as storm damage, not flood damage, and the lines are blurred,” he said. “We’re offering actual flood cover to the majority of commercial clients.”
Zurich claims sophisticated flood modelling will allow the company to accurately price the risk.
Mr Smith admits that in some cases “very high risks” will be denied cover. But he emphasised his belief that the policy is a meaningful development intended to include rather than exclude policyholders.
“Where a particular commercial property is located on a known flood plan we will work with that client to create an individual solution,” he said. “It may well be a higher deductible, and where it is absolutely impossible we may decline the cover, but I don’t see that as being the norm.”
Mr Smith also rejected criticism from some rival insurers who have suggested the decision puts the company in the path of a massive financial liability.
“They’ve said we’ll ruin it for everybody,” Mr Smith said. “That’s just so irresponsible. This is a problem needing a solution, and in trying to achieve that we make no apology.”
The insurer confirmed last week that automatic flood cover will be included in the base wording of commercial insurance policies from 4pm on September 8.
CEO David Smith originally flagged his intention to provide the cover late last year. Last week he told insuranceNEWS.com.au he believes including flood cover in commercial policies is “the right thing to do”.
“We’ve tried to take the ambiguity away from what’s covered and what isn’t,” he said. “Currently a lot of coverage is arbitrary – it’s discretionary and depends on a particular event. That doesn’t serve the industry very well.”
Mr Smith says the Zurich policy goes further than current market practice. “In a lot of cases insurers try to classify many claims as storm damage, not flood damage, and the lines are blurred,” he said. “We’re offering actual flood cover to the majority of commercial clients.”
Zurich claims sophisticated flood modelling will allow the company to accurately price the risk.
Mr Smith admits that in some cases “very high risks” will be denied cover. But he emphasised his belief that the policy is a meaningful development intended to include rather than exclude policyholders.
“Where a particular commercial property is located on a known flood plan we will work with that client to create an individual solution,” he said. “It may well be a higher deductible, and where it is absolutely impossible we may decline the cover, but I don’t see that as being the norm.”
Mr Smith also rejected criticism from some rival insurers who have suggested the decision puts the company in the path of a massive financial liability.
“They’ve said we’ll ruin it for everybody,” Mr Smith said. “That’s just so irresponsible. This is a problem needing a solution, and in trying to achieve that we make no apology.”