The meaning of flood and defining it for insurance purposes

Development of a standard definition of flooding is not new ground for the Australian insurance industry. A standard definition was developed in 2007 and 2008 and submitted to the ACCC who rejected then rejected the definition.

According to Rob Whelan chief executive of the Insurance Council of Australia, [see article] the industry has continued to tackle the issue of the need for greater flood cover by developing the National Flood Information Database which provides access to accurate and up-to-date flood maps and is critical to providing flood insurance in Australia.

As Mr Whelan says in the article “The standard definition would have been a useful but not essential adjunct to the availability of reliable and accurate flood data…
It is neither accurate nor appropriate to assert that a standard definition will result in all insurers covering all types of flood in all policies. Nor is it appropriate for insurance products to become so vanilla that there is no choice of product for consumers.”

The article then provides a Ten Point Plan to provide the “framework for engagement, discussion and clarification”.

Should there be a standard definition of flooding for insurance purposes?