Insurers block claims amid NSW, Queensland mouse plague

Homeowners hit by the mouse plague sweeping eastern Australia are finding they can’t make insurance claims for the damage dealt by the vermin.

Rural communities in western NSW have been battling a plague of mice that are destroying their livelihoods. Picture: David Swift

Insurers are knocking back claims from customers who’ve been smashed by plagues of mice running across parts of eastern Australia.

Mice populations have been booming across cropping regions, Queensland’s Toowoomba to right through to the Murray and Riverina regions straddling Victoria, in the wake of drenching rains and a bumper harvest across many grain growing districts.

The resulting pestilential plagues of vermin have been wreaking havoc on farms, destroying crops in storage, fodder in barns, homes and contents, and terrorising townsfolk.

The plague is so bad the NSW government set aside $50m on Thursday to cover costs for farmers and households battling the mice in regional and rural parts of the state.

Under this package households would be eligible to claim rebates of $500, and small businesses $1000, to cover baits.

At the same time some banks are offering relief packages for regions affected by the mice plague.

Suncorp on Friday said customers in western NSW and parts of Queensland had the opportunity to defer scheduled loan repayments (including interest only) on a case-by-case basis, or restructure loans without incurring fees.

But for many people who might seek to make an insurance claim to cover the resulting damage from the mice, insurers are pointing to a standard cover exclusion that knocks back vermin-related claims.

AIA brokers managing director Paul Griffin said although it was possible to purchase policies which covered vermin damage, many farmers did not buy it as an add on.

“Crop insurance usually covers fire and hail,” he said.

“But vermin damage is just another cost that has to be worn by farmers.”

Insurance Australia Group, which is behind several major brands including NRMA and CGU, said it had only received 17 mice-related insurance claims arising from the plague.

IAG executive general manager direct claims, Luke Gallagher, encouraged people to lodge claims to ensure they were properly scrutinised.

“This is a really awful situation for all the people and businesses across the state impacted by this mouse plague. And it’s terrible to see our farming communities facing another disaster following the last drought and COVID-19 impacts,” he said.

“Generally, damage caused from vermin or insect plagues, such as mice chewing through electrical wiring, is excluded.”

“However, our NRMA Home Policy and WFI Commercial & Rural Plan will cover the subsequent damage caused by mice chewing through electrical wiring or plumbing, for example, if this leads to a fire or water from a pipe flooding an area of the home.”

Rural communities in western NSW have been battling a plague of mice that are destroying their livelihoods. Picture: David Swift

Much of the damage from the mouse plague is hitting farmers who store grain on-site hardest.

But not all farmers were caught by the mouse plague, ASX-listed grain major GrainCorp said it had foreseen the explosion in vermin in the wake of a bumper summer’s harvest.

Chief executive Robert Spurway said the business had prepared its defences to beat back the mice.

“One of the advantages of our bulk handling operations is we’re able to protect against these challenges in a very confident way,” he said.

But The Consumer Action Law Centre chief Gerard Brody said he was concerned vermin exclusions were unreasonable and caught many unaware.

He said the issue went to the broader problem of a multitude of events that were excluded without a clear justification.

“We need reform to general insurance so there’s clearer standard cover to limit what’s not covered,” he said.

Herbert Smith Freehills partner Mark Darwin said while most claims would be blocked there was a potential for some mice-hit insureds to make a claim for vermin damage.

“Insurance covers sudden and extreme events. Typically vermin will chew away wires, It’s regarded as a wear and tear type uninsurable cost,” he said.

“When a mice plague hits they can hit with great force. You could see an argument that a sudden and unforeseen event like that might be insured.”