The following are the most frequently asked questions following a disaster. Please read closely as this information can greatly assist you, your family and friends throughout the recovery process.
Where are the insurers?
The insurance industry is on-the-ground within hours of a disaster event so, if you’re reading this, we’re already here. Industry representatives will also be present at most community recovery centres and community forums.
My home is not safe to be lived in, what do I do?
Contact your insurer immediately. If you have home or building insurance, your policy may provide emergency temporary accommodation.
How does a Catastrophe/Disaster Declaration affect my claim?
A Catastrophe Declaration is made by the Insurance Council and means additional resources are made available to speed up insurance claims processing. In contrast, a Disaster Declaration is made by government and may make additional funds available for the recovery. These declarations have no effect on your insurance, your excess or what is covered by your policy.
When will an assessor attend my home?
An insurance assessor will inspect your property as quickly as possible once you’ve lodged a claim. That said, following large disasters, access to your property may be limited for several days or weeks. Your insurer will tell you when to expect your assessor.
Fraudsters and unexpected persons offering services
Unfortunately, disasters can attract fraudsters looking to profit from others misfortune. If a builder or assessor unexpectedly arrives at your door offering services, you may ask to see some identification for your peace of mind. You may also contact your insurer to confirm the builder or assessor has been appointed to assist with your claim.
The ‘Mud Army’ and good Samaritans
During disasters, good Samaritans may – with the best of intentions – attempt to remove damaged items from your home. Unfortunately, they often remove parts of a property which are not damaged or could have been easily repaired, complicating your insurance claim.
If good Samaritans offer you assistance, ensure only damaged fabrics posing a health hazard (such as couches and carpet) are removed, and only after you have taken a photograph and kept a sample.
Excess: what is it / do I have to pay it?
An excess is the amount you have agreed to pay towards each incident. The specific amount will be set out in your Certificate of Insurance. You may be required to pay more than one excess depending on the circumstances. If you are unsure, ask your insurer. A Disaster Declaration does not remove your obligation to pay your excess.
Flood v storm: and I covered?
If you did not opt-out of flood cover, and your property has been inundated with water, you will be insured regardless of whether the inundation was from a flood or storm water.
If you opted-out of flood cover in your policy, your insurer will typically arrange for an independent hydrologist to inspect your property in order to determine whether the inundation was from flood or storm water. The industry has a standard definition of flood which can be found in your policy.
Inundation to you property can be caused by a combination of both flood and storm water. If this is the case, and you opted-out of flood cover, your insurer may reduce your claim by the amount of damage it determines was caused by the flood water, but you will still be insured for the damage caused by the storm water.
Is storm surge covered?
Insurance policies typically do not cover storm surge. That said, if your property was damaged by extreme weather (such as a cyclone or a large storm) at the same time as the storm surge, the damage caused by storm surge may be partially or fully covered depending on the circumstances.
What should I do with damaged materials that smell / are making me sick?
If wet or damaged materials (such as carpet and couches) pose a health hazard; take a photograph, keep a sample and discard these items. Keeping these items is a risk your health and can cause further damage to your home. If you’re unsure if an item can be discarded, speak with your insurer.
Can I claim for spoiled food?
If you have contents cover, your insurer may provide a payment to cover spoiled food without the need for receipts up to a set amount. Check your PDS or speak with your insurer for more information.
What is a ‘Make Safe’?
A ‘Make Safe’ is immediate rectification works to prevent further damage to your property or make the site safe to visit. This may include fitting tarpaulins to your roof or treating debris with an adhesive to prevent the spread of contaminants.
A ‘Make Safe’ may initially be conducted by emergency services, government agency or a contractor appointed by your insurer.
Who pays for debris removal?
In the event of total loss, debris removal can be very expensive depending on location and whether contaminants (such as asbestos) are present. Some policies may provide a certain allowance for debris removal above the sum insured, while others will deduct this cost directly from the sum insured. For more information, check your insurance policy or speak with your insurer.
If many buildings have been destroyed, Local Councils will usually waive the tip fees which significantly reduces the cost of debris removal. In some circumstances, the State Government may cover all or part of the cost for debris removal.
What is a Scope of Work?
A Scope of Work is a document that sets out the agreed items that need to be replaced or repaired. After you have lodged a claim, an assessor will visit your property to assess the damage. You can assist the assessor by helping them identify all the damage. The assessor will then prepare a Scope of Work for you to approve.
You do not have to sign the Scope of Work if you do not agree with it. If there are items missing from the Scope of Work, let your assessor know as soon as possible.
Can I change the Scope of Work?
A Scope of Work is not necessarily fixed and can be amended by agreement with your insurer. Additional damage may not become apparent until the repair work commences. In this event, the insurer may add additional items throughout the repair. If new items need to be added to the Scope of Work, your insurer may appoint another assessor or an engineer to provide a second opinion.
‘Lack of maintenance’ – what does it mean?
If a house hasn’t been well maintained, it is at a much higher risk of being damaged by extreme weather. For this reason, when you apply for insurance, insurers require you to confirm your home is well maintained. If an insurer believes your home hasn’t been well maintained and it has contributed to the damage, they may reduce the amount they will pay you or require you to fix the maintenance issue before they repair your home. In some cases, the insurer may deny the claim.
Do insurers use local builders?
Insurers constantly make an effort to support local trades during disaster recovery. However, the primary focus will always be on ensuring homes are repaired quickly and to the best possible standard. Relying solely on local builders will significantly delay the recovery process. For this reason, insurers also use qualified and experienced builders from across Australia to ensure communities are back on their feet as soon as possible.
How long will it take to repair my building?
The time it takes to repair your building will depend on the extent of damage and the complexity of your claim. Unfortunately, repairing extensively damaged buildings can take considerable time. The majority of claims will be closed within 6 months, but it may take up to 12 months for complex repairs and total rebuilds. Once your Scope of Work is complete, ask your insurer for a timeline.
Rebuilding to a newer code
Depending upon the age of your home and its location, it may need to be repaired to a higher standard of construction that was originally used. For example, if your home is on bushfire prone land, it will need to be rebuilt to the Bushfire Attack Level (BAL) rating for your address. This will increase the cost of repair.
Under-insurance / Rebuilding will cost more than my insurance policy provides
You may have selected insurance cover for less than the cost of repairing or replacing your property. In this event, you will either need to contribute to the cost of repair above the amount you are insured for, or accept a cash settlement.
What is a cash settlement?
A cash settlement means the insurer gives you a cash payout instead of repairing your building. Be aware, if you accept a cash settlement that may be the end of your insurance policy, depending on the extent of the damage.
Cash settlements can be for part of the repair or for full and final settlement of your claim. Therefore, you need to ensure all damage has been noted before accepting a cash settlement as additional damage will generally not be covered by the insurer.
If you accept a cash settlement, your insurer does not guarantee the quality of the repairs. Therefore, if there is a fault with the repair work, you will need to seek rectification from the builder you appointed to do the work.
Do I have to repair my house with the cash settlement?
You are entitled to spend your cash settlement in any way that you choose. That said, your building will not be insurable whilst it remains unrepaired (see ‘lack of maintenance’ above). If your home is damaged in the future, and you failed to repair previous damage, an insurer is likely to decline your claim.
Why is my cash settlement less?
If you accept a cash settlement, it may be less than the amount your insurer would have paid its preferred builder. This is because the insurer’s builder is often from out-of-area and has an allowance for additional expenses (such as accommodation and transport). These costs are not incurred by local builders and therefore are not included in your cash settlement amount.
Car Insurance Claims
Cars that have been damaged in a natural disaster have to be managed in different ways by your insurer, depending on the state of registration. In some instances if the car is not economical or safe to repair it will need to be written off and de-registered with the government.
In some instances where the vehicle is safe to drive and only has cosmetic damage, for example from hail or flooding, you may have the option of receiving a cash settlement and organising your own repairs.
It is important to note that it can be very difficult to insure a car that has been cosmetically damaged. Speak to your insurer about any special arrangements that may be in place for handling written off vehicles in your state.