8 AUGUST 2011
Whilst the Queensland floods earlier this year revealed that many did not take out flood cover thinking that their premises were not likely to flood, others were unaware that they were not covered for flood or found the detail of their insurance policies confusing. This has not only left them without insurance cover, it has also led to disputes and lengthy delays with insurers about whether the damage was in fact caused by storm or flood.
Now is the time to check your PDS or policy wording (not just the policy schedule) to confirm the extent of the cover and any excess that may be applicable in the event of any natural disaster.
Concepts such as ‘proximate damage’, ‘all in cover’ and ‘defined events policy’ must be understood. They require an assessment as to how effective the cover is having considered all the likely events that may occur and for which cover might be required but which are not explicitly referred to in the document.
Definitions and terms used in the policy documents may vary making it difficult to assess your cover. In the context of flood cover, generally, storm and tempest damage refers to the inundation of a property by water as a result of storm, while flood damage refers to the inundation of a property by water which overflows from a natural watercourse. Property damage caused by the later is not covered by many policies, nor is damage where the property is inundated by mingled waters from the storm and from the overflow of a natural watercourse. In many cases policies do not cover damage where the proximate cause of the damage is another phenomenon even though this may itself be caused by water from a storm.
The intricacies of terms such as replacement value, the effect of averaging clauses, the temporal and financial limits to damage claims and direct or indirect damage often mean advice needs to be obtained on the legal definition of the relevant term in order to understand your policy.
You are a valued Kinneally Miley contact, for more information related to this Legal Update please contact us.
[contactsbox] [leftcolumn]Contact Partner: Ross Kinneally
Direct Telephone : 07 3210 5770
Mobile Telephone : 0419 773 003
[email protected]
Contact Partner: Tracey Miley
Direct Telephone : 07 3210 5780
Mobile Telephone : 0438 776 161
[email protected]