Are you concerned about floods? Find out whether you're covered by your home insurance policy.
If your home was affected by a flood, would you be covered? It's a question many Australians have but whether you'll have cover will depend on several variables. First and foremost, is whether your policy indeed covers floods. Not all home insurance policies provide cover for floods and when they do, it will depend on the circumstances that brought about the flood and how the flood is defined.
This guide outlines how insurers cover floods, how to reduce your risk of flood, and how to find flood cover.
Have you considered adding flood cover to your home and contents policy?
What is defined as a flood?
Australian insurers have to abide by a standard definition of flood. The standard definition of flood in Australia is:
- any lake, or any river, creek, or other natural watercourse, whether or not altered or modified; or
- any reservoir, canal, or dam."
How do I know if my policy covers flood?
Make sure you’re fully aware of your flood risk when choosing or renewing your home and contents insurance.
In order to work out whether you are covered for loss and damage caused by flood, check the policy wording in the product disclosure statement (PDS). If it is covered, the PDS will include an explanation of the cover available in the section that lists the benefits of your policy.
The document will also outline flood loss or damage not covered in the general exclusions.
Source: floods.org.au How many flood-prone properties are there in Australia? Number of urban residential properties susceptible to mainstream riverine flooding with an ARI of 100years
How do insurance companies determine my flood risk?
Insurance companies assess a wide range of factors and information from multiple sources to determine your level of flood risk. Factors include:
- Flood maps
- Historical flood records
- The ground elevation level of your property
- Information about your building, for example is it raised above ground level?
- Topography of the surrounding area
- Ground cover
- Tidal influences in the surrounding area
- Independent hydrologist reports
While in the past insurers assigned a level of flood risk based on your postcode, they are now able to form a much clearer picture of the chances of an individual property being affected by flood. Your level of flood risk is then reflected in the cost of your insurance premiums.
What are the different types of floods and am I actually covered for them?
There are three main types of flood:
- Flash flood. Also referred to as stormwater runoff, this type of flood occurs when a large amount of heavy rain falls in a short period of time, for example during a severe storm. If the drainage system has insufficient capacity to cope with this intense downpour, it (and river and creek systems) will overflow.
- Riverine flood. This type of flood takes place when a prolonged period of rain causes streams, rivers, creeks and dams to overflow. Riverine floods occur in low-lying areas, and in flat inland parts of Australia they can stretch over hundreds or even thousands of square kilometres.
- Actions of the sea. This third type of flood occurs in coastal areas due to a storm surge associated with a tsunami or tropical cyclone. Many insurance policies do not cover you for actions of the sea.
What kind of exclusions are there?
It pays to be aware of the exclusions that apply to your flood insurance. While the list of excluded events varies between insurers, the following events are usually excluded:
- High tides or king tides
- Storm surges that do not happen at the same time as a flood
- Sea waves
- Normal movement or changes in ocean levels
How can I make sure I'm ready for a storm?
Storms are one of the main ways that flooding occurs. So what can you do to prepare for storm season and protect your home? Try the following:
- Clean up outdoors. When the wind picks up, everything from small pot plants to kids’ trampolines can turn into dangerous projectiles. Put loose objects away, tie bigger ones down and protect everything you possibly can from the elements.
- Clean your gutters. Make sure there are no blockages or build-ups of leaves and other debris in your gutters and downpipes. These can cause flooding when heavy rain hits.
- Check your trees. Make sure there are no trees with branches overhanging your home, or that could cause damage to power lines in a severe storm. Don’t be afraid to call in the experts if branches are difficult to get to.
- Check your roof. Are there any loose tiles or unsecured corrugated sheets on your roof? Make sure everything is firmly secured so that it doesn’t turn into a projectile or pose a flood risk to your home.
- Prepare a supply kit. Battery-powered torches and a radio are essential inclusions in any storm survival kit, as are first-aid supplies and water. You may also wish to include any important mementoes you would desperately love to protect from damage or loss in a storm.
- Move your car into the garage. Get your vehicle out of the elements and protect it from damage.
- Batten down the hatches. Secure your doors, windows and awnings against the elements. Plywood coverings for your windows can offer much-needed protection in extreme weather.
- Stay indoors. Stay well out of harm’s way and listen for the latest weather announcements and updates. When you do venture outside again, stay away from fallen power lines.
6 tips for making flood cover easier
- Know your flood risk. Make sure you’re fully aware of the flood risk to your property before you take out cover. This will help you work out whether or not flood cover is essential for you.
- Read the fine print. Read your policy documents closely so that you know exactly what type of floods are included in cover and what sort of loss and damage your policy covers. This will ensure that you don’t get any nasty surprises if your property ever suffers flood damage.
- Contact your insurer. If you’re unsure whether your policy provides flood cover or not, contact your insurance provider for more information.
- Check with your local council. Your local council should be able to tell you whether your property is at risk of flooding and also provide you with flood maps.
- Compare your options. Some policies include flood cover as standard, others don’t include any flood cover at all. Other insurers will give you the choice of opting in or opting out of flood cover depending on your needs, so shop around and compare the features of a range of policies.
- High flood risk = higher premiums. It’s worth knowing that the higher the risk of flood for your property, the more your insurance premiums will be. However, you may be able to reduce your premiums by taking steps to reduce the potential impact a flood could have on your property.
What should I do after an insured event?
- Take all reasonable steps to prevent any further loss or damage
- Immediately contact your insurer to lodge a claim
- Provide your insurer with full details of the insured event
- Supply them with any supporting evidence you have pertaining to the loss or damage
Your insurer may then send out an assessor to inspect the damage at your property. The assessor will submit a report to the insurer to help them determine whether or not to accept your claim. In some cases, the assessor may not be able to determine if the damage to your property was caused by storm or flood, so a hydrologist will be dispatched to make a decision on whether your property was damaged by storm water or flood water.