Flood Insurance: What Can You Claim?

BrisbanefloodAre 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.

What is a flood?

In order to understand the flood insurance cover available, it’s important to first look at how your insurer defines a flood. A standard definition of flood was introduced by regulators in 2012. It defines flood as: “The covering of normally dry land by water that has escaped or been released from the normal confines of:

  • Any lake, or any river, creek or other natural watercourse, whether or not altered or modified
  • Any reservoir, canal, or dam.”

This definition had to be fully adopted by Australian insurers by June 19, 2014.

How do Australian home insurers treat storm and floods?

What is covered?What isn't covered?
  • Loss or damage to your contents caused by flood
  • Damage or loss caused by actions or movements of the sea or storm surge
  • Damage or loss caused by collapse, erosion, landslide, landslip, mudslide, shrinkage, subsidence, vibration or any other earth movement
  • Damage or loss caused by flood if you do not have flood cover
  • Damage or loss to gates, fences or wall fences that were in a state of disrepair
  • Damage or loss if you asked to have flood cover removed from your policy
  • Damage or loss to swimming pools
  • The cost of cleaning mud or debris out of tanks, swimming pools or spas
  • The cost of cleaning your contents

Exclusion for new policies

  • AAMI do not insure you for bushfire, flood, storm or tsunami in the first 72 hours of your policy, except in very limited circumstances. Consult the PDS for complete cover details
What is covered?What isn't covered?
Including loss or damage from:

  • Surface run-off rainwater from surrounding areas that occurs within 24 hours of a storm or heavy rain
  • The escape of rainwater from any drain, gutter or water pipe

Including damage or loss caused by:

  • Erosion, landslide, mudslide, subsidence or any other earth movement that occurs within 72 hours of a storm
  • Damage or loss caused by flood
  • Damage or loss caused by hail, rain or wind entering your home due to:
    • A design fault, faulty workmanship or structural defect
    • Alteration work, building additions or renovations
    • An opening that was not created by the storm
    • Lack of maintenance
  • Damage or loss to:
    • Driveways, gardens or garden borders, or paths
    • Fences and gates that are not structurally sound or well maintained
    • Garden retaining walls
    • Jetties, pontoons or wharves
    • The cover and/or liner of a swimming pool or spa
    • The surface of a tennis court
    • Water in a swimming pool or spa

Exclusion for new policies

  • Budget do not cover for action of the sea, high water, or underground water loss or damage caused by flood. For a full list of terms and conditions, please consult the PDS.
What is covered?What isn't covered?
  • Damage or loss to your contents caused by flood
  • Damage or loss to your home caused by flood
Loss or damage to:

  • Driveways, gardens, garden borders, pavers or paths
  • Fences and gates that are not sound or maintained
  • Garden retaining walls
  • Jetties, pontoons and wharves
  • The cover and/or liner of a swimming pool or spa
  • The surface of a tennis court
  • Water in a swimming pool or spa

Exclusion for new policies

  • Aussie don't cover actions of the sea, high water, or underground water loss or damage caused by flood. For a full list of terms and conditions, please consult the PDS.
What is covered?What isn't covered?
  • Loss or damage to your contents caused by flood
  • Damage or loss caused by actions or movements of the sea or storm surge
  • Damage or loss caused by collapse, erosion, landslide, landslip, mudslide, shrinkage, subsidence, vibration or any other earth movement
  • Damage or loss caused by flood if you do not have flood cover
  • Damage or loss to gates, fences or wall fences that were in a state of disrepair
  • Damage or loss if you asked to have flood cover removed from your policy
  • Damage or loss to swimming pools
  • The cost of cleaning mud or debris out of tanks, swimming pools or spas
  • The cost of cleaning your contents

Exclusion for new policies

  • Suncorp don't cover flood, storm or tsunami in the first 72 hours of your policy, except in very limited circumstances.
  • Additionally, Suncorp don't cover damage caused by flood, storm or water entering through openings in the roof, unfinished sections of your home or unit or walls. Consult the PDS for complete cover details

What is covered?What isn't covered?
  • Damage to your building and/or your contents caused by storm, rain or flood
  • Damage caused by storm, rain or flood to:
    • Fences and gates
    • Privacy screens or retaining walls
    • PVC blinds, shade-cloth, shade-sails or umbrellas
    • Solar covers, spa or swimming pool covers
  • Damage caused by water entering your building through an opening your roof or wall created for the purposes of additions, alterations, renovations or repairs
  • Damage caused by water entering or penetrating your building because of poor maintenance
  • Defective workmanship, fault or structural defect
  • Water damage to your building caused by rain seepage or storm unless the water is the result of an opening made by the storm
What is covered?What isn't covered?
  • Flood is defined as the covering of normally dry land by water that has escaped or been released from its normal confines including:
    • A canal
    • A creek
    • A dam
    • A lake
    • A natural watercourse
    • A reservoir
    • A river
Loss or damage to:

  • Driveways, garden and their boarders, paths and pavers
  • Fences and gates that aren't structurally sound
  • Garden retaining walls
  • Jetties, pontoons or wharves
  • Pool or spa covers and liners
  • Tennis court surfaces
  • Water in pools or spas

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. If after reading the PDS you’re unsure about the cover available, contact your insurer for clarification.

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 

What events aren't covered by my policy?

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 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
  • Topography of the surrounding area
  • Ground cover
  • Tidal influences in the surrounding area
  • Independent hydrologist reports
  • Information about your building, for example is it raised above ground level?

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.

How can I make sure I'm ready for a storm?

Following the severe storms and intense weather conditions that battered much of NSW in April 2015, an increasing number of Australians have become aware of the importance of making sure your home is ready to withstand a storm. What can you do to prepare for storm season and protect your home?

  • 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.

What are the different types of floods?

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. While most insurers will cover you for a storm surge that occurs as a result of a cyclone, some won’t cover you for damage caused by a tsunami.

What should I do after an insured event?

  1. Take all reasonable steps to prevent any further loss or damage
  2. Immediately contact your insurer to lodge a claim
  3. Provide your insurer with full details of the insured event
  4. 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.

Flood insurance tips

  • 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.

 Compare what Australian insurers cover in relation to floods

paintings / Shutterstock.com

Was this content helpful to you? No  Yes

Related Posts

Ask a Question

You are about to post a question on finder.com.au

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Disclaimer: At finder.com.au we provide factual information and general advice. Before you make any decision about a product read the Product Disclosure Statement and consider your own circumstances to decide whether it is appropriate for you.
Rates and fees mentioned in comments are correct at the time of publication.
By submitting this question you agree to the finder.com.au privacy policy, receive follow up emails related to finder.com.au and to create a user account where further replies to your questions will be sent.

Ask a question
feedback