Fine detail insurance policies could ruin businesses
INSURERS have been accused of "tricky tactics" as scores of businesses across Townsville find out they were covered for storm but not flood.
For mum and dad bakery franchisees, the Bamfords, the fine print could cost them their livelihoods.
"Why should we go bankrupt over a natural disaster?" Lyronne Bamford asked.
Her husband, Justin, said their insurer Elders never told them they were not covered for flood.
"We feel we've done all the right things and found out at the 11th hour that we are not covered for the things that we should have been covered for," Mr Bamford said.
The Bamfords, likes scores of other businesses across the city, are facing equipment and stock losses running into hundreds of thousands of dollars after their Brumby's Bakery at Fairfield Central shopping centre was inundated with about 50cm of water.
While federal reforms in 2012 required homeowners to be protected by a standard definition for flood in insurance policies, it did not apply to businesses and most insurers still do not provide flood cover for business.
Ms Bamford said they had secured an emergency payment of $700 from Centrelink but faced months of hardship while insurers decided their future.
"Everything is up in the air, we have no shop, our staff have no job and we have nothing," she said.
LNP Leader Deb Frecklington said insurers must ditch the "tricky tactics" and pay out on their policies, while Deputy Premier and Treasurer Jackie Trad has written to insurers calling on them to deal with people in a "fair and compassionate way".
"We've made it clear to banks and to insurance companies that we expect them to work with us to support those impacted by the devastating floods across North Queensland," Ms Trad said.
But Insurance Council of Australia spokesman Campbell Fuller said insurers, while they would do their best to help customers, would pay claims in accordance with the policy that was purchased.
"Though many Townsville businesses affected by the catastrophe did buy flood cover, the ICA is concerned that a significant number chose not to purchase flood cover," Mr Fuller said.
"If a business believes it was not properly informed about flood cover at the time of purchase, the policyholder should take this up with their insurance broker.
"Customers who decided against purchasing flood cover, or chose to opt out, should still lodge a claim through their insurer or insurance broker. Most policies include storm cover."
Mr Fuller said where flood cover was not purchased it would typically be tested by the insurer through an independent hydrology process. This would determine if the inundation that caused the damage was to be classified as flood water or storm water.
According to Elders 90-page product disclosure document for business property insurance, the policy covers wind and rain but not loss or damage "by sea, tidal wave, high water, flood".
A spokesman for Elders was not immediately available for comment.