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Two years after the floods - the situation

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The second anniversary of the devastating floods that hit Queensland and Victoria in 2011 is taking place over the week from 10 January 2013. 
More than 66,000 claims were lodged with insurers following the Queensland and Victorian floods, most of which were resolved without dispute.
However, as an external dispute resolution scheme that provides free, fair and accessible services to consumers who are unable to resolve disputes with financial services providers, the Financial Ombudsman Service (FOS) has received disputes about these events over the past two years.
The most common issues have been whether people were clearly informed of their insurance policy coverage, whether people had received all pertinent documentation regarding their insurance policy and the use and analysis of hydrology reports and the application of exclusion clauses in insurance policies.
Each dispute is unique and its resolution depends on the particular facts involved including the location, topography, time of inundation, and wording of the insurance policy in question. In reaching a Determination, FOS looks at all available information provided by the parties and in many circumstances conducts site visits. 
One of the more complex issues surrounding the Queensland floods related to the release strategy in relation to the Wivenhoe Dam. FOS weighed up the available evidence and took into account the findings of the Queensland Flood Commission before determining that the heavy rain that fell from 4am on January 11, 2011 prompted engineers to later adopt the ‘W4’ release strategy at Wivenhoe Dam, which in turn was the trigger that led to the flooding of many properties. As a rule, therefore, those properties flooded within 24 hours of 4am on January 11 were likely to be covered if their insurer had provided flash flood cover within 24 hours of commencement of heavy rain. If on the other hand, the insurer hadn't provided that level of coverage, then the consumer quite possibly would not have been covered.


Statistics – (as at 2 January 2013) Queensland floods 

FOS received 1,182 disputes regarding the Queensland floods and resolved 1,016 or 86%, resulting in the largest number of disputes lodged with FOS from a single natural disaster in Australia.
Of the 166 disputes still with FOS, 30 or almost 20% are close to being resolved, 13 of which are with applicants (consumers) waiting for them to accept our Determination (formal decision). Of the 166, 66 or 40% were received in the past six months. 
Where FOS has had to make a Determination (formal Panel decision) approximately 40% were found in favour of the consumer and 60% in favour of the insurer.


Victorian floods
FOs received 276 disputes regarding the Victorian flood and resolved 230. Of the 46 remaining, many are close to being resolved. Of the 46, 14 were received in the past six months.
Consumers have a period of two years to raise a dispute with FOS after they have received a final decision letter as a result of the going through the insurer’s internal dispute resolution process. 

The Financial Ombudsman Service (FOS) is a not-for-profit external dispute resolution scheme that provides free, fair and accessible services to consumers (including some small businesses) who are unable to resolve disputes with financial services providers that are members of FOS.
 

Last changed: Jan 12 2013 at 10:11 AM

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