Australians are closer to no-nonsense flood insurance following the passing of the Insurance Contracts Amendments 2012 (the Bill) in the Senate today.
This Bill implements two key proposals from the Reforming Flood Insurance: Clearing the Waters discussion paper released in April, and announced as part of the Government’s response to the National Disaster Insurance Review.
“People deserve to know exactly what is, and what is not, covered under their insurance policies,” Mr Shorten said.
“This is a pretty straightforward proposition, but inconsistent definitions of what constitutes a ‘flood’ created confusion and heartache for many people after the flooding in eastern Australia in 2011 and through subsequent floods this year.”
The Bill introduces a legislative framework to establish regulations for:
• a standard definition of “flood” for riverine flooding in insurance contracts of home building and home contents (combined and individual policies); small business; and strata title insurance policies; and
• a single-page Key Facts Sheet for home building and home contents insurance policies (combined and individual) which will allow consumers to see, at a glance, what is covered under their insurance policy.
“The passing of this Bill means Australians are a step closer to more certainty, clarity and security when it comes to their insurance policies,” Mr Shorten said.
The details of these measures, including the final wording of the standard definition of “flood” and the specific content of the Key Facts Sheet, will be made in regulations contained in the Insurance Contracts Regulations 1985. The draft Regulations for the standard definition of flood were released for public consultation late last year and will be finalised shortly.
A discussion paper seeking public comment on the content, format, structure and provision of the Key Facts Sheet was released earlier this year and the closing date for submissions is 23 March 2012. Prototypes of the Key Facts Sheet will be consumer-tested before the final content, format and structure of the Key Facts Sheet is settled.