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Insurer wins dispute over flood assessment 

The Australian Financial Complaints Authority has backed Allianz’s decision to increase an NT homeowner’s flood charge by more than $980 despite protests from the policyholder.

The insurer raised the flood component of its premium from $5.04 to $987 when the policy was renewed in March last year, citing updated flood mapping and rating information.

The complainant said the insurer did not back up its reasoning and had incorrectly assessed that their property was at risk of flooding. They produced an NT Government 100-year flood map of their area to support their position.

But Allianz said this did not satisfy its request for specific flood risk information from the insured’s local council or flood management authority to challenge its decision.

The insurer said some of the data it relied upon was commercially sensitive and could not be shared with the insured.

The complaints authority agrees the insurer is entitled to keep the information secret, noting “special circumstances” apply in this matter. “While it has not been exchanged with the complainants, I have reviewed the information the insurer has provided, and I am satisfied it supports the insurer’s position,” the authority’s ruling said.

Allianz said the insured bought the policy with a separate company that Allianz acquired in 2021. It said the premiums set were well below what was “appropriate for the property risks”.

The complaints authority says it has limited power to interfere with premium changes unless they involve non-disclosure of information or a breach of the insurer’s legal obligation.

“Insurers operate within a competitive market and are generally at liberty to set their policy premiums in accordance with how they assess a potential risk. [The authority’s] rules do not allow it to consider a complaint about a premium increase merely because a complainant is dissatisfied it has increased or is dissatisfied with the level it has increased by.”

It says Allianz has sufficiently explained its decision and is entitled to increase the flood component.

“I am satisfied that the insurer has demonstrated it calculated the premium based upon its risk modelling, including flood maps which show the complainants’ property is located in an area of high flood risk. There is no information to show the insurer incorrectly increased the premium or breached a legal duty or obligation in increasing the premium.”

Click here for the ruling.