Tim - the real surprise of your article was that some banks offered coverage for flood damage, and my first response was what does it cover?

The real problem is that people who build houses in flood plains cannot get flood cover for the fairly obvious reason that the house will be flooded at some point. If they insist on building in flood plains, particularly in the flood plain of the Brisbane River, then the building codes should be written so that the houses will stand partial immersion without requiring a major rebuild. Contents are another issue. Householders should not lay valuable wall-to-wall carpets and ensure that curtins can be easily removed.

You may well find that the building codes have been changed since the 1970s (the last set of floods in Brisbane), but housing stock does not turn over that fast. In any case the simple rule of thumb has always been - flood plain, no flood cover..

Tim O’Dwyer;

And why do the banks not insure their own interest in the asset of the mortgaged building? How simple that would be for all!

That would be very simple for all, the bank insures against mortgage default, which is in the mortgage payments. You pay the house insurance.
You should know what you are paying before you sign a mortgage aggrement, would be handy.

Looks like more lenders are begining to feel compassionately guilty about their flood insurance failings. The Courier Mail newspaper has reported today that the National Australia Bank has set aside $15 million and pledged to pay the insurance claims of all its policyholders in Queensland, even though its policies do not cover flood. The Courier speculates that this decision is likely to put pressure on other companies and follows the example of RACQ and CommInsure which have committed millions of dollars to "ex gratia" payments