On Sunday, Sydney had a storm that did a lot of damage. What is unusual is the increasing number of storms each year - and the ferocity they cause. Science puts this down to global warming and the weather people explain that hot air rises and when it meets cold upper air the two combine to form a storm cell of unusual intensity.
In the far distant past this phenomenon happened only occasionally - and when it did people described it as a " cloud burst ". A huge amount of water dropped from the sky in a small area and over a very short period of time. This overwhelmed the local drainage system, causing a flash flood that damaged both properties and cars.
The fact that this is now a common occurrence is starting to show up in increased insurance premiums. It will probably result in the insurance industry redefining the policies they offer to allow a basic policy that gives cover against fire and theft, but introduces new rules on water damage - which has always been a point of contention anyway. Many a heated battle has been waged over the difference between a " flood " and a " rain storm event ".
Unfortunately, this phenomenon is exacerbated by things like the progress in automobile design. It is accepted that if the modern car is inundated with water - it is an insurance " write off ". The technology involved is so intensive that repair and replacement is economically out of the question.
Even a few inches of water entering the average home will ruin floor coverings and destroy the electrics of refrigerators, washing machines and other appliances. The cost of an average such water claim will run into thousands of dollars.
Modern trends in building design are not helpful. The average new home sits on a concrete slab whereas in the past homes featured elevated foundations. As a consequence, even a small rise in water levels will cause entry problems.
The insurance industry is not a benevolent society. Insurance generally is a form of gambling. It is a bet that the majority of items covered by insurance will not be damaged by the event that happens to some of them, and consequently the income from premiums will be greater than the out flow from claims. As this outflow increases, premiums must rise to achieve balance.
Be prepared to see water damage in all it's forms treated as a separate insurance option in policies as this " cloud burst " phenomenon increases. Drivers will certainly reconsider driving through floodwater if they know that their vehicle is not covered against water damage, and householders will give thought to house design and furnishings for a similar reason.
Otherwise, the day will come when insurance becomes beyond the ability for the average person to access.
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