'Show us the cover': brokers at a loss over farms and flooding

Brokers have continued to flag concerns that flood cover for farms and rural properties is not available – despite initial assurances from the Insurance Council of Australia (ICA) that it is.

As insuranceNEWS.com.au reported earlier this week, the issue was highlighted by a couple on a flooded rural property near Shepparton, Victoria, who say their home is wrecked and they could not have bought flood cover even if they wanted to.

They said their broker told them no insurer would insure their property for flood and that “there’s a big hole in the market”.

ICA responded by saying that “flood cover is available for all properties, often as an extension to farm business products”, although insuranceNEWS.com.au understands the peak body is now working on a more detailed statement.

Many brokers have contacted the National Insurance Brokers Association with concerns about the situation and ICA’s stance.

Steven Prince, Director at Ovens Valley Insurance Brokers, in Victoria, says insurers “don’t want to go near it”.

“Can the ICA produce any evidence where flood cover is offered for rural products in our jurisdiction? Every regional broker would welcome their findings,” he wrote on the insuranceNEWS.com.au LinkedIn page.

Mr Prince says if the cover is available, brokers need to know so that they can offer it to clients – whether they end up taking it or not.

Callum Woolley, from Launceston-based Intas Insurance Services, says he “totally agrees” that flood cover is not available for rural properties.

He says that farm policies exclude flood for almost everything, apart from motor vehicles.

The “only way” to possibly get flood cover for a home situated on a farm would be to get the home covered under a domestic home policy, but he says very few insurers are willing to do this on a site over two hectares.

Those insurers will often decline once they see the address, and “if you do find an insurer to write the risk” the premiums can be “overly excessive”.

Insurers say one of the reasons they can’t offer flood cover for homes on farming properties is because they do not know precisely where the home asset is located, and therefore they cannot accurately price the flood risk.

Mr Woolley says with today’s technology “it shouldn’t be too hard” for insurers to ascertain the exact location of a farm dwelling and underwrite the flood exposure accordingly.

“However, we get the impression that this extra research for the underwriters is all too hard,” he said.

insuranceNEWS.com.au has put brokers’ concerns on the matter to the major underwriters and ICA, and will publish the responses in a later article.