NRMA v Collier

The New South Wales Court of Appeal considered the dispute between NRMA Insurance and Mr. Collier concerning the interpretation of a motor vehicle insurance policy. Mr. Collier sought to claim under his policy for damage sustained to his vehicle, which he alleged was caused by a "flood" as defined by the policy. NRMA denied liability, contending that the damage did not fall within the policy's definition of a flood.

The central legal issue before the Court of Appeal was whether the damage to Mr. Collier's vehicle constituted a "flood" for the purposes of the insurance policy. This required the Court to interpret the specific wording of the policy, particularly the definition of "flood," and to determine whether the circumstances of the damage met that definition.

The Court analysed the policy's definition of flood, which included "inundation by water from above or below." It found that the damage arose from water entering the vehicle's engine bay from below, as a result of the vehicle driving through a large puddle of water that had accumulated on the road due to heavy rain. The Court held that this constituted an "inundation by water from below" and therefore fell within the policy's coverage. The appeal was allowed, and the matter was remitted to the primary judge for determination of the quantum of damages.