CGU embraces automatic flood cover

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12 December 2011

CGU’s home, contents and landlords policies will automatically include cover for flood from February.

All current policyholders will be notified by mail or via their insurance broker of the change, which CGU CEO Peter Harmer says will “remove ambiguity when a property is damaged by storm or flood”.

Financial Services Minister Bill Shorten has welcomed the announcement, which will be based on the new standard definition of flood agreed between the industry and the Federal Government.

Calling on other insurers to “match CGU’s improved customer service”, Mr Shorten said the release of draft regulations bringing the standard definition into effect “is an important step in ensuring consumers can make informed decisions about the level of flood cover they need”.

A CGU statement says the improved access to flood-mapping data and a commitment from the Federal Government to develop flood mapping was also responsible for the decision to introduce automatic cover.

The company will calculate flood premiums based on the property address, the flood risk and the likely severity of damage.

Mr Harmer says automatic flood cover will speed up the claims process by removing the need for complex assessments.

Customers will also benefit from a review of CGU’s internal dispute resolution system. All information used to make decisions on claims will now be provided to customers as a matter of course.

“It’s clear to me that the process sometimes didn’t meet our customers’ expectations and it is important we respond to this,” he said.