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Unfair Rejection of Cyclone Insurance Claims

Queenslanders should be prepared to contest insurance companies refusing claims as result of the recent Cyclone events in North Queensland and Storm and Flooding events in South Queensland.

Businesses and home owners take out insurance in good faith and with the legitimate expectation that cover would be provided in the event of unforseen disasters such as Cyclones Yasi and Anthony and the recent Queensland Floods. These events have been described as “Queensland’s $6bn Nightmare.”


Townsville lawyer urges cyclone and flood claimants to stand up to insurance companies

“I have clients who are already being refused claims by insurers” says Evan Sarinas of Sarinas Legal, “What they find disappointing is that Insurers have embarked on a massive self promotion media campaign in the aftermath of these disasters but have been told that they will either not be paid or will be paid a substantially reduced amount.”

Smoke and Mirrors “Policies are extremely complex documents with carefully chosen wording drafted by the insurer who has the advantage of knowing precisely what events or damage are not covered. When it is time to claim the insured is often refused cover because of policy interpretation. The insured never understood the Policy and or the Policy is illusory.”

Some insurance companies refuse cover because they say the damage is from “storm surge” or “action of the sea” or because the damage did not fall within the particular definition of “flooding” within the policy. They will engage expert hydrologists to provide reports on causation to bamboozle the victim with science and deny claims.”

“These distinctions can be artificial and amount to nothing more than an insurance company deploying smoke and mirrors to avoid paying up” says Evan Sarinas. “One is a direct consequence of the other. Storm surge is a consequence of cyclone. Flooding is a consequence of Cyclone. These are not independent events. Causation issues are often litigated. The Court applies common sense standards in determining cause, approaching the question by reference to the understanding of “the man in the street, and not as either the scientist or the metaphysician would understand it.It will be very interesting to see how the actions of the insurer play out over the next few months or years”

“Under the Insurance Contracts Act 1984 (Cth), an insurance company must at law clearly inform the insured in writing of any exclusions that relate to storm, tempest, flood, the action of the sea, high water, tsunami, erosion or land slide or subsidence. If the Insurance company has not done so, the insurance company may not refuse cover.” “When an insurance company says it will look at claims on “a case by case basis” this is usually code for “divide and conquer”. Insurance companies are now assessing their overall exposure and are devising strategies to minimize claims.”

Unfair Contract Terms The Premier of Queensland has urged insurers to act compassionately. “In my 20 years of litigation experience I have never encountered an insurance company that has acted compassionately. Governments need to go further than begging insurance companies to behave properly. The insurance industry was mysteriously exempted from the legislative consumer protections and guarantees in the Competition and Consumer Act 2010 (Cth) (CCA).”

“Why is it that consumers are protected from unfair terms in contracts issued by every industry in the Australian economy except the Insurance Industry? There is a significant imbalance between the rights of an insured and the rights of a powerful insurance company and little or no opportunity whatsoever to negotiate a better insurance contract.”

“Queenslanders should not back down from an insurance company declining a claim. Study the policy and question any reasons given for rejection if it was believed that cover would be provided.”

For more information contact Evan Sarinas on 0418150111 or

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