Media Release

MARK BOURIS CALLS ON GOVERNMENT TO UNDERPIN FLOOD INSURANCE/FLOOD VICTIMS NEED TO BE AWARE OF AVENUES FOR FINANCIAL RELIEF

20 January 2011

Mark Bouris believes the current floods highlight a fundamental problem i.e. many Australians are not adequately protected, especially with regards to insurance. What homeowners and small business owners need to know is how to get quality financial advice so they are covered in the event of another natural disaster.

“Australians consider insurance a ‘grudge purchase’, something we have to have, but don’t really pay much attention to when we sign up,” says Yellow Brick Road Executive Chairman Mark Bouris.  “The problem is that insurance is always a ‘you get what you pay for’’ scenario, so people need to understand their coverage so that they know what they can expect if disaster strikes.”

While flood cover may be available in some cases, subject to additional cost, most insurers exclude flood damage from a basic policy.

“The problem is that most insurers won’t offer flood protection because they can’t, in turn, reinsure so that they’re not faced with financial ruin themselves in the face of major floods.   That is why we need the government to set up a reinsurance scheme which services APRA-approved insurers for catastrophes,” says Bouris. “There are similar schemes already in place, which involve insurers collecting a percentage of the premiums for a levy. If the government assists insurers and encourages consumers to buy from APRA-approved companies, it will encourage competition and keep rates in check.”

For those who have already been affected by the floods, the focus is now on the clean-up and rebuilding of their homes and businesses. For these folk, they need to be aware of avenues that may be available to aid in the recovery process.

“In addition to Centrelink, there are other programs in place to assist people with their current loans, term deposits, credit cards and insurance policies. It’s essential that people who have been affected by the floods get in touch with their bank or lender to find out if they are eligible for benefits which can provide relief in this time of need,” says Bouris.

Dependent on the policy of your particular lender or financial institution, you may be able to access one or more of the following:

• The opportunity to defer home loan repayments for up to three months
• Emergency credit limit increases on credit cards and deference of payment for 90 days
• The ability to restructure business loans without incurring a fee
• The ability to refinance personal loans at a discounted fixed rate
• Grants and loans for small businesses, plus repair/replacement funds

While these programs are all available, every situation is different, so people should contact their bank or lender as soon as possible to find out what opportunities are available.