In 2010-11 there was severe flooding in Queensland, New South Wales and Victoria. The large number of people affected by the floods who held inadequate insurance cover highlighted consumer confusion over the extent to which policies provide cover for flood and what cover for flood means.
On 23 November 2011 the Insurance Contracts Amendment Bill 2011 was introduced into Parliament to provide a legislative framework to allow regulations to establish a standard definition of flood.
The Hon Bill Shorten MP, Assistant Treasurer and Minister for Financial Services and Superannuation, has released an exposure draft of the Insurance Contracts Amendment Regulations 2011. The draft regulations define 'flood' and specify that it is to be used in home building and home contents insurance contracts (whether offered separately or in combined form) and contracts held by small business and strata title residences.