Insurance claims ‘may not be paid’ as fine print clauses kick in

OWNERS of some of the worst-hit homes in the savage storm may not receive a cent as insurance claims hit $56 million.

THE insurance council has declared it a catastrophe with losses running into the millions.

But for some homeowners, the devastation of the east coast storms has been compounded by news that their insurance policies may not be paid out.

The Insurance Council of Australia warned some owners of the luxury beachfront homes on the brink of collapse in Collaroy may not receive payouts for the damage done to them during massive storms and king tides in recent days.

Spokesman Campbell Fuller said most housing insurance policies don’t typically cover “actions of the sea”, which includes coastal erosion, king tides or storm surges.

Waves pound the cars parked along the Pittwater waterfront during the storm surge.

“Home insurance policies typically do not cover damage caused by actions of the sea, such as coastal erosion, king tides or storm surges,” he said.

“A small number of policies on the market will cover actions of the sea under certain conditions. “Homeowners who require this type of cover should shop around for the appropriate policy. It is important to note that home insurance policyholders do not pay a premium for risks that are not covered in their policy.”

“Ninety-three per cent of all new home insurance policies purchased in Australia now include cover for flooding (under the standard definition), but neither actions of the sea nor the effects of gradual sea-level rise are considered to be flooding for insurance purposes.”

Palm beach wharf remains under threat after waves pounded the Pittwater waterfront.

As of 9am, insurers had received 14,500 claims across Queensland, NSW, Victoria and Tasmania, with estimated insured losses of $56 million.

ICA acting chief executive officer Karl Sullivan said those figures may still rise over coming days.

Choice spokesman Tom Godfrey told news.com.au said it was vital policy holders gathered as much evidence as they could and to read the fine print of their policies.

Huge waves pummelled Palm Beach pool.

Mr Godfrey said some consumers would likely face common exclusions such as “actions of the sea” or “storm surge”.

“The last thing you want when you are cleaning up after a storm is to be left at sea by confusing terms and conditions in your insurance policy,” he said.

“It’s important to collect detailed evidence about the damage, such as eyewitness accounts, reports from independent experts and photos and videos of your property before and after the storm.

“Whether the claims process is smooth or a little rocky will depend on how your insurer defines the event that has affected your property and how clear the definitions are in your policy.”

Mr Godfrey said simple things like taking photos could help win an insurance claim.

People run after an unexpected wave hits Palm beach wharf.

He did say however that storm and flood damage is generally covered with comprehensive car insurance policies.

“It’s considered ‘accidental damage’,” he said.

“However, there will be a waiting period — 48 hours with NRMA — between the purchase of car insurance and when you can make a flood cover claim.”

He also warned people not to rush out and buy insurance as they may not even be covered depending on the timing of the storm.

“The car would not have to be parked at your residence,” he said.

“There are limits to what will be covered inside your car. For example, Allianz will only pay a maximum of $500 per event.”

He warned most home-and-contents policies covered the sudden excessive run-off of water as a direct result of a storm in your local area.

However he said not all policies would cover storm surges.

As residents on Sydney’s northern beaches spent yesterday morning walking up and down the debris-littered beach taking photos and surveying the damage, one told AAP it was “as if a tsunami had hit”.

NSW Premier Mike Baird said his government was doing all it could to assess the damage and applications for emergency funding would be fast-tracked.

Originally published as Insurance claims ‘may not be paid’ as fine print clauses kick in