mmg.com.au

‘‘Shop around’’ if you can’t negotiate satisfactory flood insurance with your existing insurer is the advice from State Member for Benalla Bill Sykes.

Dr Sykes offers this advice following a meeting between himself and State Member for Murray Valley Tim McCurdy, with RACV Insurance general manager Paul Northey.

‘‘I appreciate Mr Northey explaining RACV’s approach to flood insurance,’’ Dr Sykes said.

‘‘RACV has considered the possibility of extreme flood events in calculating their flood insurance premiums.

‘‘These events may occur as infrequently as once per 10000 years.

‘‘While most damage is caused when floods go above floor level, RACV has also factored in the cost of claims for lower-level floods.

‘‘RACV has taken a business decision to make flood insurance compulsory to avoid uncertainty during the stressful time after flood and/or storm damage.’’

Dr Sykes said RACV acknowledged the flood data was of varying degrees of accuracy and was committed to ongoing improvement.

‘‘Based on this clear statement of RACV’s (and some other companies’) position I advise people to attempt to negotiate a flood premium they consider acceptable with their existing insurer,’’ Dr Sykes said.

‘‘If these attempts are unsatisfactory then I encourage people to ‘shop around’.

‘‘Other companies are offering optional flood insurance and the option of accepting a higher excess to reduce premiums should be explored.’’

Dr Sykes said RACV and some other companies had made a business decision to make flood insurance compulsory and they have factored in quite low probability events into their premium setting.

‘‘Whatever people finally settle on they should make sure that it is in writing and that they understand the extent of the cover which they have purchased,’’ he said.