Many May Not Be Covered For Flood Damage

The Age

Saturday February 5, 2005

BRIDIE SMITH and DUNCAN HUGHES, With AAP

People are being encouraged to read the fine print of insurance policies to check their entitlements

AS THE damage bill from the vicious storm that lashed Australia's south-eastern states this week reached $120 million, the Insurance Disaster Response Organisation said 30,000 claims had already been submitted from NSW, Victoria and Tasmania.

In Victoria, about 12,000 claims worth $40 million had been received. Most related to trees falling on houses and cars, and structural and water damage to homes and businesses.

In NSW, about 15,000 claims worth $75 million had been lodged, while in north-eastern Tasmania about 2000 claims were received worth $5 million.

The national co-ordinator for the insurer's peak body, Chris Henri, said claims were spread over a wide area of the eastern seaboard and that calls were continuing to come in.

"We expect the figure will be further boosted by a number of commercial claims which take some time to assess," he said.

In Melbourne more than 5000 houses and businesses remained without power yesterday, 36 hours after the storm.

Crews from power companies worked through the night to restore power, but a TXU spokesman said about 1000 customers were still in the dark, with about 300 homes in Diamond Creek affected after a large tree took out overhead power lines.

In the south-eastern suburbs, up to 3500 Alinta cutomers were affected, and a Powercorp spokeswoman said about 80 customers were still waiting to be reconnected.

"The storm hit us very hard, and we started off with 28,000 people affected," she said.

David Gregory, the Victorian Employers Chamber of Commerce and Industry's general manager of workplace relations, said about 10 per cent of Victorian businesses, mainly in Melbourne, were affected by the storms, with some totally out of action. They ranged from banks and city firms to cafes and suburban shops.

"We have had a number of inquiries today from businesses who have not been able to either open or operate a part of their business because of some of the damage that they sustained," he said.

Most inquiries related to water damage to electrical systems and switchboards, as well as production processes.

He said many businesses could not provide work for employees, who might have to forfeit a day's pay.

"Most awards and agreements do allow employers to stand those people down and not pay them for the day," Mr Gregory said.

However, he said, most businesses expected to be back to normal by next week.

Anyone affected by the storm damage is advised to contact their insurance company as soon as possible to notify them of a likely claim, and to check whether they are covered.

A CGU Insurance spokeswoman said it had already received 11,000 claims in Victorian, and more were coming in.

All indications are that the total number of claims will rise, with many households likely to discover that their household policies either exclude cover, or do not cover the total loss.

RACV, which covers one in four Victorian homes, said it had received about 7000 claims, more than half the state's total, with the bulk seeking cover for damage caused by falling trees and water. The insurer has yet to finalise a value for the damage.

Also, if experience from the Canberra fires is any guide, many households will find their insurance does not fully cover losses.

Conditions on insurance policies vary widely, and while most cover flash flooding, they may not cover flooding from a river. -- With AAP

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© 2005 The Age

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