Welcome to Edition 25 of the Claim Solutions’ Newsletter.
Many of our past newsletters have focused on possible insured events which have occurred in Australia. This Edition considers some of the more recent disasters which have occurred beyond our shores.
While some of these may be unlikely in Australia, others could occur here emphasising the need for adequate insurance.
In addition, this newsletter includes our ongoing list of possible insured events on page 4. These include fires, explosions, a recall, chemical spills and the unfortunate storms and floods affecting the Hunter Valley region and Newcastle in NSW and Gippsland and Lakes Entrance in Victoria.
For all those who have sustained a loss we wish you: -
- A speedy recovery.
- An appropriate insurance policy.
- A responsive insurer.
- Bigger and better times ahead.
If you require any assistance in relation to an insurance claim or pre loss cover your enquiries are welcome.
News reports indicate that in January 2007 residents of a crowded neighbourhood in Guatemala City reported hearing rumblings and feeling earth tremors. Approximately a month later, on 23 February 2007, a 100 metre deep sinkhole opened up in the ground swallowing twelve homes, killing three and forcing the evacuation of 1,000 people.
Some reports suggest the sinkhole developed as a result of heavy rains and an underground sewage flow from a ruptured main. Other reports suggest it may have been the result of decades of erosion of loosely compacted soil. Sinkholes can also develop when rocks such as gypsum and limestone are dissolved by water or when subterranean gaps are created by the removal of groundwater.
Whatever the cause, the damage in Guatemala was catastrophic. The gaping hole emitted terrible odours, loud noises, and the sound of flowing water.
Sinkholes have occurred in Australia but thankfully without the devastation experienced in South America. One of the most famous Australian sinkholes is the Umpherstone sinkhole located in Mt Gambier in South Australia. This naturally occurring phenomenon was formed by the dissolution of limestone.
It is unlikely that Australian insurance policies would respond to damage caused by sinkholes as many insurance covers exclude subsidence.
On 29 May 2006 an exploratory gas well allegedly pierced a layer of rock beneath the surface of the Sidorarjo district of East Java in Indonesia. This allowed hot, high pressure water to escape. As the water rushed to the surface it mixed with soil and was expelled as mud.
Mud volcanoes can occur naturally but reports suggest this event may be the result of human intervention.
Some eight months after the eruption began the mud had dispersed over an area some 4 kilometres in diameter covering residential, farm and industrial land. In May 2007 it was reported to have covered some 700 hectares of land. Some experts suggest the mud flow could continue for centuries! Reports indicate the event may leave in excess of 43,000 people homeless.
As at June 2007 the damage was estimated at AUD$3.5 billion.
If such an event occurred in Australia we wonder whether insurance cover would be available. Like all losses, cause would need to be identified. Could the loss be classified as water damage?
Water or, too much of it, has also been a problem in the United Kingdom.
In May 2007 in northern England and the Midlands it began to rain; and it kept on pouring. It caused extensive storm and flood damage.
In June 2007, the Association of British Insurers (www.abi.org.uk) estimated that some 27,500 residences and 7,000 businesses were flood affected.
Media reports indicate that some 30,000 people had to evacuate their homes and some 3,500 people had to be rescued.
The damage bill is reported to be in excess of AUD$3.5 billion.
This extreme weather and the resultant claims would certainly have placed incredible pressure on claims personnel.
Australia has also had its fair share of storm and flood damage in recent months as evidenced by the floods in the Hunter Valley region in New South Wales and Gippsland in Victoria.
Some insurance policies in Australia cover flood while others do not. Insurance claims have to be considered on a case by case basis.
Spare a thought for the New Zealanders. On 4 July 2007 a twister struck the centre of New Plymouth on the west coast of the North Island of New Zealand.
The roof was ripped off a retail outlet and various businesses sustained damage.Unfortunately nature was not satisfied with just one tornado as the following day a swarm of tornadoes generated from cold polar air carved a 140 kilometre trail of destruction in Taranaki, New Zealand.
Trees were ripped from the ground and roofs from houses.
Power was disconnected to some 7,000 homes and the water supply to some 10,000 homes was disconnected as winds in excess of 150 kph damaged infrastructure.The damage bill is expected to be in excess of AUD$6.3 million.
A state of emergency was declared.
Most Australian insurance polices respond to storm damage and if an event such as the Taranaki Tornado occurred here, it is likely to be covered.
In 2002 the residents of Shishmaref, Alaska voted to relocate their village 12 miles south and further away from the coast. They took this extraordinary decision because the ground beneath them was literally being washed away.
Shishmaref is located in north west Alaska only 32 kilometres from the Arctic Circle. It is home to some 500 Eskimos.
Temperatures in Alaska have risen around four times faster than the global average affecting ice that forms along the coast in winter. This ice forms a natural barrier protecting the town from storms. The warmer temperatures cause the ice to thin and to melt earlier allowing the Arctic storms and the Chutchi sea to erode the soil beneath the homes.
The warmer temperatures also cause the permafrost beneath the village to melt making the soil more susceptible to erosion.
Before making the decision to relocate the whole village some 20 homes had to be moved. It was too late for one which collapsed down a slope to the water’s edge.
The relocation is expected to exceed AUD$200 million. Engineers predict all the houses in Shishmaref could fall into the sea within the next few decades.
While it is unlikely that we, in Australia, will have to consider the effects of melting permafrost we undoubtedly will have to continue to consider the impact of storms and severe weather damage.
On 2 April 2007 a shallow earthquake with a magnitude of 8.1 struck near the town of Gizo in the Solomon Islands. The earthquake caused significant damage, loss of life and left thousands homeless. A state of ermergency was issued for the Islands.
Media reports indicate the earthquake damaged shops, schools and a hospital and the resultant tsunami washed dozens of houses into the sea.
It is difficult to imagine but the earthquake lifted the island of Ranongga by some three metres causing the beaches to shift outwards by a reported 70 metres.
The resultant tsunami not only devastated Gizo but destroyed several other low lying island villages and was felt as far away as Papua New Guinea. Many countries in, and bordering, the Pacific ocean issued tsunami alerts. An alert was even issued for the east coast of Australia.
We are not immune. Earthquakes, with devastating effects, have occurred Australia and have been the subject of insurance claims e.g. Newcastle in 1989.
The residents of Hanover in Germany thought they had seen it all.... that was until they met Uschi the angry cow. Uschi was not only angry but was also pregnant when she escaped from her enclosure and ran amuck. The Charolais cow managed to allude police and fire fighters through residential streets for some three hours. Uschi became increasingly agitated as the chase progressed and began attacking anything in her path - fences, garden benches, etc, causing some AUD$41,000 worth of damage. Wish we had an office in Germany so we could handle the claims for the loss and damage caused by Uschi the Angry Cow!
The Articles which appear in this Newsletter are not intended to be a substitute for specific technical advice.