In our June 2012 update, we reported on the Insurance
Contracts Amendment Act 2012 (Cth) (Act) and
its effect for underwriters writing home building and contents
cover. Following submissions on an exposure draft of regulations
released last year, the accompanying changes have now been made to
the Insurance Contracts Regulations 1985 (Cth)
(Regulations).
The reforms are limited to 'prescribed contracts of
insurance', including contracts for home building, home
contents, strata title residences and small businesses. The
inclusion of flood cover will not be mandatory in respect of these
contracts but as a result of section 37B(3) of the Act and the
corresponding regulation 29D, the following definition of
'flood' will apply wherever the term is used in the policy
documents or supporting materials:
