Insurer NRMA’s fine print blunder

Insurer NRMA’s fine print blunder | Insurance Business

Insurer NRMA’s fine print blunder
Flood-devastation in Picton, on the outskirts of Sydney, left many homes and businesses suffering extensive damage earlier this year.

Reports soon emerged from locals who said one of the businesses affected was the local branch of IAG-owned NRMA Insurance, according to
They said the branch found itself not covered because of ‘a disputable clause around what constitutes flood damage versus storm damage’, the report said.

The direct insurer had not responded to requests for comment on the matter.

The Insurance Council of Australia (ICA) had previously outlined the definition of flood damage for insurance purposes, but said many business owners were still being caught out on it, and other fine print clauses in their policies.

The incident prompted a warning from risk management consultant Rick Stone, of Tigertail, about how important it was to fully understand the fine print before taking out a policy.

“The thing about insurance is it will cover only what you buy, so you need to be really careful and really clear about what you are insuring and what the coverage is,” Stone said in the report.

“The insurance company is there to make money… the same as the rest of us are, and we need to be aware of that: they are not a charity.

“I don’t know about you, but I’ve never seen an insurance company that’s operating from a tin shed out of the back of a cheap block of land somewhere.”

Stone recommended speaking to specialist brokers to ensure cover is appropriate.

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  • Rick 2016-11-13 11:58:30 PM
    Oh the irony!!!!
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  • John 2016-11-14 12:01:11 AM
    The standard flood definition is only obligatory for direct domestic insurance. It isn't mandatory for broker issued domestic policies or any commercial policy. Most insurers can & do use their own definitions in commercial policies & furthermore, flood is excluded from the majority of such policies. I believe that NRMA is similar to CGU, both following an IAG line & that they do not normally offer commercial flood insurance. As the local branch is probably a franchise that has insured itself with NRMA, it stands to reason that they have no flood cover. The Picton event was realistically a flood, so there shouldn't be much argument irrespective of the definitions anyway for the majority of claims.
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  • So over it 2016-11-14 12:32:10 AM
    So over being told that 'fine print' is in the policies - it is all the same size print.... I even see one broker with the tag line 'making the fine print bold' - wouldn't that just be bold fine print?
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