The insurance enigma.

Now that the waters are receding from the huge storm that hit the New South Wales coast this weekend residents will be measuring the damage - and making claims on their insurance companies.
It might be an opportune time to hark back to the experience of 1998 - when a similar storm caused massive damage and some loss of life in Wollongong and the Illawarra.
Initially, the majority of the insurance industry refused claims. They contended that the damage was " flood " - which insurers do not cover - and not " storm " - which they do.
A small number of insurers were prompt in meeting claims and issuing cheques and eventually the big two companies which covered most people caved in. That left just four insurers who stuck to their guns and stubbornly declined all claims.
Those claims were never met. One such insurer closed it's Wollongong office, sacked local staff and retreated to it's home state. Two others fell on hard times - understandably given their sullied reputation - and were eventually taken over by a major company - but with no claim retrospectively met.
The aftermath of that storm left strange experiences. One family had a wall of water run down a street and inundate their home, ruining furniture, carpets and electricals. Their insurance company rejected a claim but the wife's mother who lived in a " granny flat " at the same premises - and had insurance with a different insurance company - had her claim promptly met. Such were the vagaries of the 1998 storm.
It will be interesting to see how the industry treats this storm damage - but if any insurance company tries to weasel out of it's obligations the government should step in an appoint an insurance ombudsman to arbitrate - with sole discretion to approve claims.
Insurance companies need a license to do business in this state and any company not prepared to accept the umpire's decision should have that license cancelled and be sent packing.
The 1998 Illawarra experience should not be repeated.