What is a “flood” for insurance purposes?

The ACCC has refused authorisation of a proposal by the Insurance Council of Australia for a common definition of ‘inland flood’.

Consumer groups argued that the ICA’s definition would in fact increase consumer confusion about the meaning and nature of flood cover rather than improving consumer understanding. The ACCC is particularly concerned that the ICA definition of flood introduced a range of new concepts the legal implications of which are not clearly understood.

The definition of ‘inland flood’ proposed by the ICA was:

lnland Flood is the covering of land that is not normally under water by:
– water that overflows or escapes from a naturally occurring or man made inland watercourse (such as a river, creek, canal or storm water channel) or a water pool (such as a lake, pond or dam), whether it is in its original state or it has been modified; or
– water released from a dam whether it be accidentally released or intentionally released to control, mitigate, regulate, or otherwise respond to excess water, or
– water that cannot drain or run off as a result of water that is overflowing or escaping from an inland watercourse or water pool preventing the escape of water.

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