Floods - and insurance !

The Queensland floods will slowly subside - and then the hassles between householders and insurance companies will begin !

On past experience it is likely that about a third of householders will not have home and contents insurance policies. Most will claim that they could not afford the premiums - but insurance tends to be an optional decision and usually misses out when it has to compete against an overseas holiday, a new car or one of those expensive, wide screen televisions. That becomes a contest between an instant worldly pleasure - and protection against a possible future event.

Those with valid insurance policies are not out of the woods. Some mortgage companies insisted on flood insurance after the 1974 immersion and they should hold up legally, but other insurance companies may insist that their policies do not cover areas previously flooded in that earlier event.

Historians would do well to cite the example of the Wollongong deluge of 1998. Three insurance companies declined to pay - closed their offices and walked away from the city, leaving their customers destitute. A similar situation could arise in Queensland.

Car insurance has a happier outcome. Cars are mobile, hence the flood question does not arise, but there will still be many people who are not insured. These will be mainly older cars of less value. The risk of driving an uninsured modern day car is just too extreme for most owners.

So - there will be winners - and there will be losers. The government and the public will give generously to those in financial trouble, but unfortunately the more public donations flow to the uninsured - the less incentive that provides for people to make the sacrifice and take out home and contents insurance in preference to spending the money on pleasures.

And with absolute certainty, we can be sure that somewhere down the track Australia will face other disasters stemming from fire or flood.