Storm insurance can protect against cyclones, but not everything is covered.
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If you live in a cyclone prone area like the Northern Territory, Queensland or Western Australia, you can get cover with most standard home and contents insurance policies. Most cyclones are covered under "storms", though there are a few exceptions you need to be aware of.
Where do I get cyclone insurance?
You probably won't find cyclones listed in the PDS on its own; you're more likely to find it included in a home insurer's definition of a storm. For example, here are some definitions of a storm by well-known home insurance providers:
- Budget Direct refers to a storm as "a weather event, including cyclones, that may be accompanied by strong winds, rain, lightning, hail, snow, or dust."
- Coles states "We will cover you for loss or damage caused by: violent wind or thunderstorm (including a tornado or cyclone) [and] heavy rain, hail or snow."
- Youi defines a storm as a "violent atmospheric event which includes a thunderstorm, cyclone or strong wind with or without rain, hail or snow, but not rain showers alone."
How does home insurance cover me for cyclones?
Home insurance will generally cover your property for damage as a result of a cyclone. In most cases, you will be able to find cover under the "storm" benefit in your Product Disclosure Statement (PDS).
Put simply, most insurers will pay out if your home is damaged or destroyed as a result of a cyclone. Your home and contents insurance policy will cover you financially to repair or rebuild your home from scratch as well as replace the contents inside. Most home and contents insurance policies will cover you for the following:
- Repairing or rebuilding your home
- Temporary accommodation if your house is unlivable
- Demolishing the destroyed house including removing debris
- Regulatory fees related to building construction
- Professional services like surveyors and architects
- Repairing or replacing damaged items
- Storing your undamaged belongings if they can't be kept at your property
What won't home insurance cover me for with cyclones?
You most likely won't be covered for storm surges caused by cyclones. This is because in general, insurers don't cover storm surges. They commonly define a storm surge as an increase in the sea level caused by a weather event that pushes water onshore. A cyclone could potentially be this "weather event", hence you might not be covered.
Still confused? Insurers haven't made this one easy to work out. Put simply, a cyclone is likely to push more water towards the shore when moving over water, creating a rise in the sea level and impacting coastal areas as a storm surge. So if your home is damaged due to a storm surge, resulting from a cyclone pushing water towards the shore, you might not be covered. To be sure what you are and are not covered for, call your insurer and ask them.
Here are what some providers say about storm surge:
- Real insurance: "No cover for oceanic activity, rising damp or seepage of water from ground rain, the cost of removing or pruning fallen trees or branches or other objects that have not damaged the insured property."
- Budget Direct: "You are not covered for loss or damage caused by actions of the sea or a storm surge. You are not covered for loss or damage to
- fences and gates that are not in good condition
- garden borders, driveways, paths, pavers, or gardens
- jetties, wharves, and pontoons
- retaining walls
- the liner and cover of a swimming pool or spa
- the surface of a tennis court
- water in a swimming pool or spa"
Terms to watch out for
There are a few terms you need to be wary of when it comes to cyclone insurance. When reading through the product disclosure statement (PDS), look out for the following:
- Storm surge: Storm surges are a common exclusion, except when they occur at the same time as a flood (and your policy covers you for floods), in which case your claim will be accepted. As already suggested, it's unlikely you will be covered for storm surges even if they are caused by a cyclone.
- Flood: Flood cover is different from storm cover. While most home insurance policies come with storm cover (which includes cyclones) many policies don't include flood cover. Others might provide it as an extra-cost option. Be sure to read your PDS closely to determine whether or not your policy covers floods. In insurance terms, a "flood" is defined as "the covering of normally dry land by water that has escaped or been released from the normal confines of any lake, river, creek or other natural watercourse, whether or not altered or modified, or any reservoir, canal, or dam".
- Actions of the sea: Similar to storm surge, king tides and other actions of the sea are usually excluded from cover. You probably won't be covered for damage caused by actions of the sea, even if they are caused by a cyclone.
How to prepare for a cyclone
If you live in a cyclone-prone area, there are some important steps you should take:
Prepare your home:
- Check with your local council to see if your home is built to cyclone standards.
- Ensure you have home and contents insurance well in advance of the cyclone. Most policies will have a waiting period of around 48–72 hours.
- Check your roof and repair any loose tiles, eaves or roof screws.
- Ensure windows are fitted with shutters or metal screens.
- Trim any branches hanging over your house and clear gutters of leaves and debris.
- Check that your emergency survival kit is complete.
- Make sure everyone in the house recognises the Standard Emergency Warning Signal, which is broadcast on TV and radio when a cyclone is 12 hours or less away.
When you hear the warning:
- Stay up-to-date with current warnings for your area and receive SMS at http://www.emergencyalert.gov.au/.
- Clear your property of all loose items including outdoor furniture, children's toys, bins and gardening equipment.
- Fill buckets and your bath with water in case your water supply gets cut off. You should also have enough water purification tablets.
- Make sure your windows are closed securely. If you don't have shutters, tape your windows in a criss-crossing fashion using strong packing tape to hold broken glass in place.
What to do if you've been affected by a cyclone
If your home has been affected by a cyclone, follow these steps:
- Collect information. Collect copies of your insurance policies, recent valuation reports, identification and bank account records. Don't worry if you can't find your insurance paperwork; your insurer will have electronic records handy. You will only need your name and address.
- Follow evacuation advice. If you've been told to evacuate, stay up to date with local radio or news for details on nearby evacuation centres. Pack food, water and your emergency survival kit.
- Contact your insurer. If you've been evacuated, it's a good idea to let your insurer know as soon as possible so it can get your claim processed sooner.
- Return home and document the damage. Your safety comes first so only return when it's safe to do so. If your home is too damaged to enter, don't risk it. Otherwise, enter the property and assess the damage. Take as many photos as possible of the damage, both inside and outside, and make a list of the specific models, including serial numbers if possible, of damaged electronics and devices. You can take photographs of the contents of your fridge and spoiled food as well if your home has lost power. Avoid cleaning up until you've spoken to your insurer.
How to make a claim if your home has been damaged by a cyclone
Try and submit a claim as soon as it is safe to do so. The steps for submitting a home and contents insurance claim for cyclones typically involve the following:
- Get a claim form. Call your insurer or visit its website. Most insurers have an online form that you can email or mail.
- File a claim. Complete the form and attach any relevant documented evidence (e.g. photographs, receipts, etc) of the damage to your home and contents.
- Wait for the claim to be processed. Your insurer has up to 10 days to respond but in cases like a cyclone, there is usually more than one case which means it's likely to take a little longer. During this time it may contact you to confirm details or send an assessor to your home.
- Your claim will be accepted or rejected. If your claim is rejected, you can file an internal dispute with your insurer. If that doesn't work you can also file a complaint with the Australian Financial Complaints Authority.
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