Allianz is considering its optional flood cover offering, saying last year’s floods have “called into question” the sustainability of the current arrangement.
The insurer has provided home customers with a choice to opt in or out of flood cover since 2012.
Allianz says the arrangement means “homeowners with a high flood risk could still afford a home insurance product that protected them from all the other natural perils and losses that might befall them”.
“However, the events of last year have called into question the sustainability of maintaining such a model for optional flood cover,” a company spokesperson told insuranceNEWS.com.au.
“As a result, Allianz is reviewing its optional home insurance flood cover product.”
The spokesperson cites an example of Allianz having incurred “significant” costs from emergency and temporary accommodation payments from last year’s flood catastrophes.
The temporary accommodation payments were due to delays caused by a significant backlog of hydrology reports for customers who had chosen not to take out flood cover.
“As a result, significant claim payments were made to policyholders that didn’t have flood cover and, hence, had made no premium contribution to their flood-related payments,” the spokesperson said.