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Queensland floods - lessons learnt


Queensland residents have experienced some tough times over the past few years, with a series of successive natural disasters in the region. In 2011, more than three quarters of the State was declared a disaster zone. According to Catherine Uhr, Senior Solicitor/Consumer Advocate at Legal Aid Queensland, “many consumers were caught by surprise when they discovered their insurance policies did not cover them for damage to their home and/or contents.”

Interestingly, although the number of insurance claims that resulted from the Queensland floods in 2010/11 and 2013 were not dissimilar (131,935 claims and 87,847 claims respectively), the number of disputes that resulted from these claims was vastly different, with 60 times fewer disputes related to the 2013 event. FOS received 1419 disputes related to the 2010/11 floods and cyclone Yasi, whereas to date we have received just 17 disputes in relation to the more recent floods in early 2013 (though we expect this number to rise a little over the coming months). Of course, we need to take into account the fact that they were different events that had different impacts on the affected communities. However, on the whole, it has been encouraging to see the vast reduction in disputes being brought to FOS. 

Legal Aid Queensland’s consumer protection unit opened more than 560 files for clients wanting to challenge their insurance refusals in relation to the 2010/11 floods, and of these, 293 original insurer decisions were overturned. As a whole, clients recovered more than $15 million in insurance payouts to restore their home. In comparison, for the 2013 floods Legal Aid Queensland has provided advice to fewer than 50 clients and it’s possible that not all will translate into casework/files.

Despite the terrible situation many Queenslanders have experienced, we can take some positives out of the different outcomes for consumers between the two events. In the years between the two flood events, the huge amount of work done by consumer groups, community, the insurance industry and government has paid off and one of the benefits has been a marked reduction in the number of disputes lodged at FOS. 

Some of the changes have included:

  • greater availability of flood cover
  • a single definition of flood
  • a comprehensive review of insurers' claims handling and dispute resolution processes
  • consumers having a better understanding of flood cover, and
  • better disaster mitigation and response measures from the government and community as a whole.  


One of the biggest differences has been the rapid rollout of flood cover by insurers. In Queensland, 91.4 per cent of home and contents policies are now purchased with flood cover, compared with about 3 per cent in 2006. However, according to Legal Aid Queensland, increased premiums due to the addition of flood cover as a standard policy inclusion by some insurers may mean a portion of the population, though now aware of flood cover, may not be able to afford it.

The other important factor has been the federal government’s introduction in June 2012 of a standard definition of flood. This was a move the insurance industry had first sought in 2008, and it has provided greater certainty to consumers about their flood cover. Commenting on the benefit of the standard definition of flood, Insurance Council of Australia (ICA) spokesperson Campbell Fuller said that “the standard definition of flood has led to a greater uptake of insurance, and it has raised awareness of the issue of flooding and the importance of flood cover.”

Now, when the ICA declares a catastrophe it initiates a 24-hour hotline to provide policyholders with a first point of contact for any questions they have on insurance and making a claim. The ICA’s Risk and Disaster Planning Team also quickly deploys staff to affected areas. They work with government agencies and community organisations to address policyholders’ misunderstandings and to handle issues that could lead to disputes being lodged with insurers and FOS. FOS also has a dedicated hotline and other natural disaster-related information on the website to help customers in flood and bushfire situations.

An additional problem in 2010/11 was that consumers faced lengthy delays waiting for their insurer to make a decision on their claim, which in turn led to complaints being lodged with FOS. Since then, the ICA Board agreed to revise the General Insurance Code of Practice, and the change means that policyholders are now provided with a clear timeframe for the handling of their claims, including during catastrophes.

Further lessons have also been drawn from the vast body of decisions that FOS made in resolving the 1419 disputes from the first event. According to Catherine Uhr, “consumer lawyers were very clear about which of the legal arguments raised in the 2013 cases were unlikely to succeed, due to a large body of decision making by FOS related to the 2010/11 flood events. This knowledge, coupled with a highly coordinated response by insurers and their peak body the Insurance Council of Australia to deliver a rapid and proactive response to claims handling and management, has led to far fewer disputes.”

Graham Warner, Dispute Manager (General Insurance) at FOS says: “unfortunately, we will continue to have to deal with disputes that are in relation to natural disasters. However, we are very pleased to see the changes and improvements that have been made across the board and we hope that we will continue to see a decline in the number of complaints that are brought to FOS through these types of events.”