Flood damage has the power to wreak havoc and devastation in a matter of days or even hours, as we have just seen with the recent floods in New South Wales and Queensland. Over 25,000 homes were damaged in the chaos and almost 5,000 were deemed uninhabitable. Yet, while most of these property owners would have had insurance to protect their homes and belongings, not all flood damage insurance claims will be approved.
In some cases, disputes happen because property owners do not read the fine print in their policies, or simply do not understand what is covered. In other scenarios, insurance companies will decide to dismiss a flood damage claim. This can happen for several reasons – for instance, perhaps there is certain information that the claimant has not disclosed or has misrepresented.
For those who have been affected by floods and suffered significant damage or even lost their homes or businesses, this can be extremely distressing. Flood damage means that people suffer financially but they also lose personal belongings, important documents, and even pets and livestock. When a claim is dismissed, this can compound the stress of these losses.
That said, there are steps that you can take to make the process easier and improve your chances of making a successful claim. –
1. Document the damage
First and foremost, document any damage – no matter how inconsequential it seems. Even a small amount of mould can spread quickly in the right conditions, so take several photos of all your affected belongings. Photograph your items in different angles and in bright lighting so you can see the full extent of the damage.
Make a detailed list of any damaged items, take your photos before you start the clean-up, and start gathering together any receipts and insurance paperwork. Your list should be as detailed as possible with brand names, models and an item description. Ideally, you also want to have photos of your home before it was damaged so you can demonstrate the difference. Ensure the photos are stored safely online so you’ll never lose them.
If you can, keep samples of fabrics or other materials to show your insurance assessor. Just be sure to remove any items that might pose a health risk for you and your household, or store them elsewhere.
2. Check your paperwork
Before you file a flood damage claim, check your insurance paperwork. Assess what you are (and are not) able to claim. Some flood damage insurance is far more comprehensive than others and allows affected homeowners to claim more extensively.
It’s important to understand the extent of what you can claim before you start making your claim. Search for the Product Disclosure Statement (PDS) or your insurance type and read all the fine print thoroughly. Make another list of all the items you can claim. This PDS would have been given to you when you purchased your insurance cover but it should also be available online.
3. Understand common flood damage insurance issues
Before you start making your claim it’s important to understand the most common issues people face when it comes to flood damage claims.
There are several reasons why you may not get your claim approved or get sufficient cover. Here are some of the most common:
- You’re underinsured – this means that the agreed-upon values you insured your home and contents for are not correct. This can happen when you haven’t updated your policy or your situation changes.
- You obtained the incorrect cover – for instance, you only obtained storm cover but the damage was caused by flooding or vice versa.
- The damage was caused by a defect in your home (such as a leaking roof) that you were already aware of.
- Damage has been caused or made worse because of bad design or faulty construction.
If there are exclusions or conditions within your particular policy, your claim may also be refused, or you may not receive as much as you expected.
4. Contact your insurer
You should contact your insurer at the earliest possible opportunity to alert the insurer to the claim, as some insurers may want to undertake an inspection.
Take note of the date and time you contacted your insurer, the name of the person that you notified and what you spoke about. Always request an incident number. Be consistent with the information you provide your insurer, as they will record your call and may refer back to it when processing your claim.
5. What to do if your claim is refused
If your claim is refused, your insurance company is taking too long to get back to you, or you are simply not satisfied with the solution your insurance company has provided you, we recommend that you contact a lawyer to assist you. Your solicitor will advise you about the most appropriate step to take which may include but is not limited to the following:-
- Complain in writing to your insurer.
- Complain to the Australian Financial Complaints Authority (AFCA). Keep in mind that this usually requires you to complain to your insurer first.
- Apply to the appropriate tribunal for consumer claims – if it exists in your state, that is.
- File a claim with the court.
If you do choose to go to court, you should seek legal advice as soon as possible. It is important to obtain advice on your unique situation and, if needed, gather more evidence prior to commencing legal proceedings.
Case study: Wollongong Floods, 1998
In the floods that ravaged Wollongong back in 1998, property owners in the region suffered hundreds of millions of dollars of damage to their homes and businesses. Several insurance companies initially refused to provide insurance coverage, claiming that the damage was caused by floods, not storms.
A partner at Maguire & McInerney, Mark McDonald, led the fight against the insurance industry and was instrumental in the successful resolution of virtually every insurance claim for victims of storm damage throughout the Illawarra region. Mark was presented the Centenary Medal for services to the community in relation to this fight and in recognition of his other community involvement.
If you are not satisfied with the resolution of your flood insurance claim yet you have significant flood damage, it is definitely worth seeking legal advice. Contact the team at Maguire & McInerney Lawyers or phone us directly on 02 4228 5911 to learn more.