The Federal Government has announced plans to implement a universal definition of flooding in a bid to avert future mass insurance disputes.


The plan comes as hundreds of Queenslanders have taken legal action against insurers who have refused payment on grounds on specific definitions of flooding.


The plan forms part of the Federal Government’s Natural Disaster Review Panel, which made 47 recommendations earlier this year.


"The devastating floods in Queensland, NSW and Victoria last summer showed how vital it is to get flood and other disaster insurance right. The Review's recommendations are a good place to start in mitigating the risk of disasters and making sure everyone has the appropriate insurance arrangements to set them on the path towards recovery after disaster strikes," Assistant Treasurer Bill Shorten said.


The Government will release draft regulations about the standard definition for consultation by the end of the year.