Imagine being several months pregnant and winched by helicopter from the roof of your rapidly flooding home, just in the nick of time. As if that wasn’t enough, picture the months of painful pleading with your insurer to pay out a legitimate claim, to no avail.
BY SHANNON MOLLOY
That’s one remarkable and terrifying story I heard following the Queensland floods in 2011. When I met that particular woman almost a year later, her home had been rebuilt and her family’s farm was almost back in production.
How anyone could bounce back so quickly was beyond me, especially considering the family’s insurer refused to pay out. They did it with blood, sweat, tears, the help of a compassionate community and a grant from the relief appeal.
The images of the flood are burnt into the consciousness of every Australian. No matter how far you lived from Queensland, you no doubt sat glued to the rolling news coverage as the devastation unfolded.
Those scenes of the Brisbane River breaking its banks and entire suburbs being swamped with water came like a swift kick to the throat. And just when it seemed we couldn’t cop another blow, a monster in the form of Cyclone Yasi roared in and left a trail of destruction across communities in the far north.
The ramifications of Queensland’s summer of sorrow, as it was dubbed, have been wide reaching. There was praise, criticism and questions aimed in all directions from the top down.
Much was said about the progress of rebuilding, distribution of relief funds or the extent of rules and regulations. Perhaps one of the loudest rebukes was directed at the insurance industry.
In the weeks after the floodwaters receded and the north’s famous blue skies returned, homeowners waited patiently for assessors to visit their badly damaged or completely destroyed properties. Then they spent some more time waiting for their claims to be processed. In too many cases, that amounted to months and months of ‘review’.
Many were knocked back or given sums far less than was required. Some weren’t insured at all or had the wrong type of cover for those types of weather events. The heartbreaking stories didn’t seem to stop – average families who’d lost everything and had no hope of getting back on their feet.
In the December issue of API, I shared the heartbreaking but inspiring story of property investor Michelle Levings, whose home in Brisbane’s western suburbs was completely inundated. Her insurer stuffed her around and she wasn’t initially eligible for relief appeal funds, as they were prioritised for owner-occupiers over landlords.
It was only after a compassionate appeal and review of her circumstances that she received some money from the government. Her insurer never came to the party. After that, it was sheer perseverance and the help of mates that got her home back in shape and re-rented, so she could start on the long road to financial recovery.
In recent weeks, the Financial Ombudsman has overturned hundreds of rejected insurance claims from the 2011 floods, finding they’d been wrongly denied and ordering they be paid out.
Simon Barnard is the president of Strata Community Australia in Queensland and believes nothing has changed in the last two years when it comes to insurance. In fact, he reckons another natural disaster would see a repeat of the same insurance nightmare.
“We believe more needs to be done to improve the processing of insurance claims following serious disasters,” Barnard says.
That’s one of numerous and almost countless issues relating to insurance to arise from the disasters. Spare a thought, for example, for unit owners in the far north whose strata building insurance premiums went through the roof – jacked up in some cases by thousands of dollars.
So strong was the criticism that the Federal Government launched a parliamentary inquiry into the insurance industry’s response.
The then-Bligh Government made a submission to a federal parliamentary inquiry into the insurance industry’s response to the floods, suggesting the Commonwealth amend the relevant code of practice to specify a timeframe for processing claims.
If a provider dragged their feet past that reasonable period, they’d be forced to pay the claim in full, the submission proposed. In addition to that idea was the suggestion of adopting a common definition of ‘flood’ and naming and shaming insurers found to have done the wrong thing.
The practicality of ideas like these aside, not much has changed since Queensland’s darkest hour and that’s not good enough.
Insurers run a commercial business – that’s fine – and they took a massive financial hit in the wake of the floods and Yasi. But two years on, the vast majority have posted pretty healthy profits while countless property owners still struggle to get back on their feet.
Shannon Molloy is the deputy editor of Australian Property Investor magazine, www.apimagazine.com.au