Insurer response to major floods under review

Some homeowners report lapses in flood insurance claims process

Insurer response to major floods under review

Catastrophe & Flood

By Abigail Adriatico

The responses of insurers to homeowners looking for flood insurance claims are being examined following a complaint made by a couple in Molong, according to a report by Yahoo! News.

In November 2022, Philip and Ann-Maree Davis experienced a severe flash flood, which ravaged their three-bedroom house in Molong, central west NSW. Following the disaster, the couple kept living in their dilapidated home before they moved into a caravan and a small insurer-provided demountable.

In a recent federal parliamentary inquiry, Philip said that their insurer, Suncorp, had its AAMI offer cash payouts that ranged from $96,000 and $116,000, which was insufficient, as local builders that were going to repair their house said that the rebuild would cost more than twice the amount provided by the insurer.

Philip said the experience took a toll on the couple’s mental wellbeing as well as their work and finances.

Following this development, the inquiry is now examining the responses by insurers to insurance claims made in other parts of NSW, Queensland, Victoria, and Tasmania, which were some of the areas most heavily impacted by major floods in 2022.

With the complaint gaining traction, the Davises’ rebuilding plans for their home were approved by Suncorp executives which had notably intervened when there was local publicity surrounding the issue.

Molong was one of the places that was impacted by flash floods with the continued heavy rain at the time. The nearby town of Forbes had also experienced several floods in a year. Mayor Phyllis Miller had said that the heavy downpour had caused the destruction of more than 100 houses and badly damaged a total of 1,327.

Miller that insurers had pressured affected residents to accept cash payments instead of awaiting the approval of their claims. The payments were alleged to be more than $100,000 below the policies’ values.

Cabonne Council mayor Kevin Beatty and Miller had said that insurers were raising the prices of their premiums and provided the same approach to flood insurance claims, even if the risk levels of homes vary in every town and village.

The inquiry regarding the situation is scheduled to converse in Eugowra and Richmond some time this week. It will be held at the NSW Hawkesbury.

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