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Standing Committee on Social Policy and Legal Affairs
03/08/2011
Operation of the insurance industry during disaster events

MAY, Mrs Caroline, Private capacity

MAY, Mr Bruce, Private capacity

CHAIR: Welcome. Thank you very much for coming. Do you have any comments to make on the capacity in which you appear?

Mrs May : We are partners of a banana growing plantation.

Mr May : I am a partner with my wife Caroline in a plantation.

CHAIR: Would you like to make an opening statement before we move to questions in terms of your experience with the insurance industry?

Mrs May : We had probably a good experience. We were phoned the day after the flood by our insurance company and they said that they were there to help us, although they knew and we knew we were not covered by flood insurance, only storm and tempest damage—

CHAIR: Had you always known that?

Mrs May : We had always known that. We bought our property knowing that it flooded, although not expecting anything like we got. It never had before, but we knew that it would sort of have to come in the roof before we were covered rather than through the door.

CHAIR: Sorry to drill down into this, but you read those words or did the broker or the—

Mrs May : I had read had the policy, yes.

CHAIR: So you had read those actual words.

Mrs May : Yes.

CHAIR: You are that one per cent of Australia that actually reads your insurance policy.

Mrs May : I do; I read everything. So we did know. So I was actually a little surprised. We were definitely going to try and make a claim but we had not really even got around to talking about it at that stage—we would have though. So we were told right there and then that we had $20,000 cover for our goods—for our furniture and effects inside—which wasn't all that high; contents.

CHAIR: So had they called you, did you say?

Mrs May : They called me. They rang my mobile when we were still in town trying to get away from the water. It was the first phone call we had.

CHAIR: Is that right? So that is a good experience.

Mrs May : It was.

CHAIR: Tell us more then—after the phone call.

Mrs May : After the phone call they said, 'Just go ahead can and get what you need. Keep your invoices up to the value of $10,000. White goods, electricals, computers'—things like that that went under—'and then photograph everything that was damaged'—

CHAIR: When you said it went under, do you mean it went under because of the flood or because of the downpour?

Mrs May : No, it went down under the flood. Water came into our house, more than a metre. We had everything lifted up probably that high—the height of a fruit bin. That is what you pile everything up on but it was probably more like the height of this table. So fridges, all those things, but nothing was high enough.

CHAIR: So you did prepare? You knew something was coming?

Mrs May : We did prepare. We had everything lifted up but not high enough. I had taken my computer with me. We had taken a few things but we just did not expect it. The only water that had ever come in that house before was about a foot deep so we did not expect to have that sort of flood. Anyway, they said, 'Go ahead and buy everything. Photograph everything that was damaged. Send that in. Don't worry about waiting for a claim form. Put a letter with it and explain what happened and what damage occurred and enclose the invoices for the things you replaced.'

CHAIR: So even though you thought you weren't covered—

Mrs May : We were surprised.

CHAIR: The person that called you said: 'Make a claim.'

Mrs May : Their actual words were: 'Because it has been a declared a natural disaster, we have decided to cover you.' So we did that. We took photographs of everything. We sent them in. We went and bought stuff and, as soon as we could get back into the house, we went and bought it. We paid for it, sent the invoices and we were paid within a month.

CHAIR: Is that right? That is a great experience. We have not heard a lot of stories like that so that is great to see you go on the record.

Mrs May : It was a $10,000 claim. It was not a really big one.

Mr NEUMANN: Who were you with?

Mrs May : WFI.

Mr NEUMANN: Wesfarmers.

Mrs May : Yes, Wesfarmers Insurance.

CHAIR: That is wonderful. So your house was able to be cleaned. Was it a house that you could go back into if water came through the place?

Mrs May : It is a typical fibro plantation house and it all just washed off the walls and floors.

CHAIR: So you did not have to cut out the fibro or anything like that?

Mrs May : No, the house was fine, the floors were fine. There were mixtures of glued down linoleum and tiles in different rooms and it all stayed were it was. We pushed all the mud up and shovelled it out and washed the walls. We could certainly do with a coat of paint on the outside of the house because that blistered a bit but other than that there was no real damage to the house.

CHAIR: Okay.

Mrs MOYLAN: That is good news. It is always nice to hear such good news.

Mr May : About a week before that the insurance agent who comes round and renews our insurance every year called in—

CHAIR: In early December?

Mr May : Yes, it was early December. Peter Lock is his name.

CHAIR: He is an agent not an employee?

Mr May : He is an agent with WFI. If you want to buy any more insurance he is the one that does it for you. Every year they come around and see if you need to retract or put something else on it. I specifically asked him about insurance on flood because we had only just bought the place. I used to have a sheep station before that and he had our insurance down there. I knew we lived in a flood prone area so I brought up the subject of flood and he said, 'No, you don't get flood insurance.' As my wife said within a day of the flood he rang us. When we heard it was a natural disaster I phoned our local MP, Barry Haase and asked him what a natural disaster entitled us to. He said, 'I'll have to get back to you on that one,' which he did.

CHAIR: In terms of Centrelink—

Mr May : Yes all of those different things. We only had very good experiences from what did happen. The WANDRRA claims were met, the insurance claim was met, the Lord Mayor's appeal was excellent.

CHAIR: That is a great note on which to suspend the hearings. We obviously hear a lot of sad tales so it is good to hear.

Mrs May : We know that there have been some sad tales, yes.

CHAIR: And we are not detracting from that at all.

Mr May : I might add that with the crop insurance I heard talked about earlier on—I would have got here earlier but we were held up—the banana industry carries its own insurance. We pay 20c a carton into a government initiated fund and they were matching it dollar for dollar in the early stages. This fund goes back over 20 years. Normally it is meant to cover the cyclones but they did pay out quite substantially on the flood. The banana industry in Carnarvon—

CHAIR: So that is a cooperative—

Mr May : I would not say cooperative, no. Sweeter Banana is a cooperative it represents maybe a third of the growers and then there are private growers and another cooperative in town or sort of a cooperative but they all pay into one central trust fund.

CHAIR: Is that Australia wide or WA?

Mr May : It is unique to Carnarvon.

CHAIR: Okay. And the industry went to an insurance broker.

Mr May : Yes, because it was specifically there for cyclones. There was about $4 million or $5 million and I think the payout all up was about $800,000 amongst about 40-odd growers.

CHAIR: And are you turning out any bananas at the moment?

Mrs May : Yes.

CHAIR: Doing all right.

Mrs May : Some clouds have a silver lining for some people.

CHAIR: Thank you very much for taking the time to come in.

Committee adjourned at 12 : 49