Written by Carmel Davies, McColm Matsinger Lawyers.

Most of us will agree that having insurance cover for flood damage is quite important. One never really knows when a heavy downpour will cause flooding or whether a home is vulnerable to flooding even from a high tide.

However exactly what is contained in our insurance policy to protect us from the sometimes disastrous effects of flood damage? 

Firstly, let us start with the relevant wording in the insurance policy document. It is an interesting exercise to compare the wording of different insurance policies which may be thought to cover flood damage. The crucial question is do they actually cover such damage.

It is not uncommon for an insurance company to renege on an apparent commitment to pay out a claim, by relying on the particular wording of a clause or a definition in the insurance policy.

Upon examining definitions for “flood” in different policies, one will find there is no standard insurance industry definition at all. It is unwise to assume there is flood cover unless the wording in the policy document is unmistakeably clear. It is unwise to assume that insurance cover for water damage for example from rain and run-off means the same as flood cover.

In one fairly recent case* the insurance policy actually excluded cover for what most of us would consider a “flood”. The word “flood” in that policy, was expressed to mean, “inundation following an escape of water from the normal confines from any lake, reservoir, dam, river, creek or navigable canal, as a result of a natural phenomenon which has some element of violence, suddenness or largeness about it but does not mean inundation by water from fixed apparatus, fixed tanks, fixed pipes or run off of surface water from surrounding areas.

Despite the claimants attempting to obtain payment from the insurer for damage on the basis that they alleged that it was water from “rain and run-off” that caused the largest amount of damage to their property, this explanation was simply not accepted by the Court. We need to clearly understand that “flood damage” does not equate to “weather damage”.

If we want insurance cover for water damage which may arise from various sources, then we should ensure that the insurance policy that we take out, clearly outlines the range of events which we envisage need to be covered to give adequate protection.  Such events may include storms and flash flooding, rain water run-off, rising rivers canals creeks and dams, tsunamis, flood damage to gates and fences, gutters overflowing, or even flooding from dishwashers, hot water systems and burst pipes.

We may also need to check other aspects of the insurance policy we take out. For example, can we expect new for old replacement on both home and contents regardless of age? Does the policy clearly state this?

An insurer does have responsibilities to inform the insured of what a particular insurance policy covers and what is excluded in the insurance contract before contract is entered into. It is important to really understand what the policy covers and what is actually excluded.

The time to ask questions of the insurer is prior to the contract being entered into.

If disputes arise at the time you make a claim, then litigation is an expensive way of resolving issues.