Roma resident Kim Ruru, who had insured with two different agencies for his business and home,
was paid for his home but not for his business.
HUNDREDS of western Queensland residents have been hung out to dry because insurers are refusing to pay up to $6 million in claims from March's record-breaking rainfall.
Three months after 80 per cent of Queensland was declared a disaster zone, residents in the worst-hit towns of Roma and Charleville are still sleeping on the floor of rotting homes after being knocked back by insurers.
Eight insurers identified by The Courier-Mail have refused claims because a hydrologist report said homes were inundated by flood- water rather than stormwater.
For more on this issue and case studies of flood victims, see Saturday's Courier-Mail print edition
Floods aren't covered under their policies.
Maranoa Regional Council has commissioned a second hydrologist report to dispute the findings while law firm Slater & Gordon is planning a "group action" against insurers.
The owners of more than 40 properties in Roma and 11 in Bollon, outside St George, have contacted Slater & Gordon but lawyer Peter Long says that's "just the tip of the iceberg".
"There could be literally hundreds more residents affected but many couldn't get to a meeting we held last week," Mr Long said.
"Others are shy and think they have to settle for their lot.
"Insurers have a duty to their clients and they can't treat them like second-class citizens." More than 270 of Charleville's 504 properties were declared inundated by the State Government's Storm Recovery Task Force in March. Up to 130 of Roma's 324 houses were also flooded.
Residents are livid at the inconsistencies of insurers.
Streets are divided between those who have been paid out and those still waiting for money to rebuild.
Bollon and District Community Group chairman Ian Bateman successfully claimed from QBE after threatening legal action while neighbours on lower ground and insured with CGU were knocked back.
Both insurers relied on the same hydrology report.
Roma resident Kim Ruru received money from AAMI for damage to his house but is still $100,000 out of pocket after Capricorn Mutual refused to insure his business assets – an extensive tool shed under his house.
March's Big Wet broke all records. On one day, a region larger than Victoria was covered by massive falls – the most rain recorded in a single day anywhere in Australia.
The Queensland Infrastructure Association said the water may have caused more damage than Cyclone Larry in 2006, which cost $550 million not counting an additional $586 million in insurance claims and disaster aid.
Mr Long said several insurers are relying on the hydrology report of WRM Water, based at Paddington in Brisbane. He said claims averaged $60,000 but some were more than $100,000.
Most insurers ignored requests for comment. CGU spokeswoman Iwona Polski said the company had paid 95 per cent of the 920 claims from the March storms. Spokeswomen for QBE, Elders Insurance and Capricorn Mutual said policyholders could apply for a review with the Industry Ombudsman while Lumley Insurance said the company was still reviewing claims.
Consumer group Choice said the insurance industry was trying to come to a definition of floodwater as opposed to stormwater.
"The sad thing is that hasn't happened yet," spokesman Christopher Zinn said.
"The average person doesn't differentiate between the two so while it's not important to the consumer it is crucial to the policies. Don't just renew your policy blindly. Do a bit of work to look at how they pay out."
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COMMENT: The insurance companies are proving themselves to be rogues again.
The State Government should legislate to require minimum insurance cover standards
to enssure it covers flood and all other natural hazards. Spreading the risk would
eventually be for the benefit of policyholders and insurance companies. Meanwhile,
the insurace companies and their overpaid directors are fattening their profits as the
expense of ordinary Queensland battlers.
