During the Brisbane 2011 flood a Body Corporate building in Milton suffered severe damage where the water was over 6 foot high.
Unfortunately there was no flood cover under the policy wording, so we recommended the Body Corporate lodge a claim with the Insurer so an Assessor and a Hydrologist could be appointed.
As most Insurance Companies at this time they were awaiting the outcome of the various reports from the Insurance Council of Australia, The Ombudsman, QLD Legal Aid and the hydrologists reports before making any decisions.
In August 2011, the Insurer finally came back with a decline based on the flood exclusion. The decision was obviously not favourable for the Client and the matter was referred to FOS to review.
The argument is that the water came up from the drains and not from the river as stated in the Flood definition; …the inundation of normally dry land by water overflowing from the normal confines of any natural watercourse or lake (whether or not altered or modified), reservoir, canal or dam’
In November 2011 FOS came back with a decision and concurred with the Insurer and the decline based on the flood definition and agreed that the water came in via the overflow of the River.
In the meantime a Court case was happening in the name of LMT Surgical v Allianz who was the same Insurer as the other Client. LMT Surgical was in the same vicinity as the other Client with the same Insurer and the same circumstances. The water came in via the storm water drainage pipes. The Queensland Supreme Courts found in favour of LMT Surgical and the Insurer was found to be liable to cover the loss occasioned by the flood water damage.
Quick thinking from the Broker, because of this well publicised Court Case, it set precedent for other claims of similar nature. The Broker went back to Allianz and said you have paid this other claim due to the Courts Decision, and given that the flood definition in the business pack policy was exactly the same in the Strata policy would you like to revisit this one too?
Great news for the Client, Allianz overturned their previous decision and agreed to cover costs which totaled in the vicinity of $250,000.