FUTURE flood victims with insurance will be covered for any floodwaters regardless of the source, according to the Federal Government.
Assistant Treasurer Bill Shorten this week announced the government was working toward implementing a standard definition of flood in the biggest shake-up of the multi-billion dollar insurance industry.
The move follows the Natural Disaster Review Panel's submission of 47 recommendations arising from the Federal Government's industry review.
Mr Shorten said flood would be defined as "the covering of normally dry land by water that has escaped or been released from the normal confines of any lake or any river, creek or other natural watercourse, whether or not altered or modified, or any reservoir, canal or dam".
"What we are looking at is that while we want to make it mandatory that insurance companies offer the proposition that you can be covered for flood insurance, we also make it clear is our discussion and recommendations that Australians can have the opportunity to opt out if the cost is too high," Mr Shorten said.
"People living next door to each other in the same street, in the same postcode, will not receive differential treatment as to the payment of their home insurance policies."
The draft regulations will be released in the coming weeks and will include the standard definition.
It means essentially all homeowners will be covered for floodwaters, regardless of water height and the cause of the water inundation, in the event of future flooding.
It is welcome news for flood-affected Emerald residents who too late discovered their insurance policy either didn't cover flooding, or covered only certain types of flooding.
For Emerald customers such as Waldby Crt resident and Suncorp Insurance client Greg Smith, the introduction of a standard definition was welcome news.
Mr Smith, whose home was engulfed by about a metre of water, said if a uniform definition of flood was implemented across all insurance companies, customers could expect quicker payouts.
"It would probably mean more representatives from the companies would be on the ground," he said.
"No doubt this is going to cost people more, but when you have the choice of spending a little bit more to insure everything or paying for something that is no good, which would you prefer?"
Mr Smith said he could not fault Suncorp on its insurance policy, but nevertheless welcomed the Federal Government's move to standardise the flood definition.
Legal firm Slater & Gordon's commercial and project litigation leader James Higgins said a standardised definition of floods with insurance policies would prevent the sort of confusion that arose in the wake of the 2011 Queensland floods.
"Thousands of families lost their homes and possessions to the floods," he said.
"For those people who had their claims rejected on the basis of flood definitions, the impacts were catastrophic.
"While litigation may resolve some of these disputes, it is preferable to move towards an accessible, standardised flood definition that provides clarity when the next natural disaster strikes."
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