Staff resources of the Australian insurance industry peak body, the Insurance Council of Australia, were stretched and Jackson Wells was called on to provide support public relations staff to augment its in-house team.
I was called into ICA head office to handle media and other requests for comment or action on all manner of stories and issues resulting from the disasters.
Natural disasters bring out the best and worst in people. The media would call in and offer up both the negative and the positive.
Thankfully, the stories they told of people helping others, communities pulling together and heroic rescues far outweighed reports of people deliberately parking rust-bucket cars below the 1974 Brisbane River flood line in the hope the vehicle would be washed away and they could claim an exaggerated payout.
Throw in some posturing politicians at all levels and town planners who allowed people to build houses on river flats or approved cute little British stone bridges over creeks in parks that stopped natural flow, and the result was a cocktail of heroism counter balanced by blame shifting, finger pointed, deceit and plain stupidity.
The lessons we can all learn from this is to read your insurance policy Product Disclosure Statement; it’s your insurance contract.
Sadly, the Australian Competition and Consumer Commission (ACCC) had rejected an industry definition of flood in 2008.
So people with properties near rivers or creeks that rose and caused damage were not covered by the definition of ‘flood’ written into their policies. They could have bought policies for ‘riverine flood’ but most chose not to. The ACCC also kept its head low.
The definition of ‘flood’ in most policies is restricted to water that damages a property because of the overflow caused by blocked or backed-up drains and the like.
The tabloid media and some populist parliamentarians saw the disasters as a David Consumer versus Goliath Industry story, and began pushing for anyone with water damage to be given a flood insurance payout.
Paying insurance claims for which premiums haven’t been collected is a quick road to penury, so the insurance companies naturally resisted this.
But the situation was dreadful for people who had lost everything, and tough on the insurance staff who had to deal with such horror and sadness.
The good cases are the ones where people took out a riverine policy for the full replacement value of their properties and possessions. Here the insurers quickly paid up as policy holder, assessor and insurance company knew where they stood.
That happened soon after each disaster, but good news is sometimes no news.
After three weeks, I realised the complexity of insurance work and developed a deep respect for the insurance professionals.
Behind the forms we sign and the money we pay each year is much work by actuaries, statisticians and economists to assess risk and value.
The lessons I learnt were:
- There is a need for better public education on insurance
- Read the product disclosure statement to see what is and what isn’t covered.
- If unsure, ask; and get the answer in writing.
- Part of the premium for fire insurance goes to the government to run fire brigades. If you don’t take out fire insurance, what moral right do you have to expect fire crews to risk their lives saving your house?
- If you want to save on insurance, don’t underinsure; lift the threshold at which the insurance company liability cuts in.
Sadly, the horrors of these Australian disasters, as real and distressing as they were, paled against what occurred in the following weeks in Christchurch and northern Japan.
