Damage from flooding can be extremely costly, whether you are a home owner or renter. Only a few centimetres of water through a home can cause extensive damage to the kitchen, carpet and furniture. Structural damage to homes and buildings is also expensive to repair.
It used to be unusual for home insurance policies to include cover for flood. Previously, a standard policy typically included cover for damage from ‘storm’, ‘flash flood’ or ‘runoff’ (with terms and definitions varying between insurers) but not flood. This distinction was confusing for many consumers and led to considerable distress, financial loss and disillusionment for insured homeowners when their properties were flooded.
Following the Natural Disaster Insurance Review in 2011, the majority of insurers now offer flood cover in some form. According to the Insurance Council of Australia, flood insurance is available for all Australian properties in a variety of policy formats designed to suit individual circumstances. Consumers can choose to purchase products with flood cover as a standard inclusion, products that allow the consumer to opt out of the flood component, or products that exclude flood from the policy. In 2013, over 80% of policy holders had flood cover active in their policy.
While the information in this website is useful for understanding your flood risk, it is not suitable for determining whether a property is free from the risk of flooding. Flood studies have not been undertaken for all areas in South Australia and for all flood types – if your property isn’t shown as inundated on flood map, it could be that a study has not yet been undertaken in your area yet.
What am I covered for?
All insurance policies are different and you need to check your policy to see what you are covered for. Some insurance companies flood as a standard inclusion, while others will allow you to opt out in order to reduce your premium.
It is best to be covered for both storm and flood if you are at any risk from a flood. If your property is flooded it may be difficult to prove the source of the flooding and if you are only covered for storm damage you may not receive a payout.
Since June 2014 there has been a standard definition of flood that is required to be used by insurance companies. This definition covers flooding from a watercourse, as flooding from a storm event is covered by storm cover.
The definition of flood is:
“the covering of normally dry land by water that has escaped or been released from the normal confines of any of the following:
- a lake (whether or not it has been altered or modified);
- a river (whether or not it has been altered or modified);
- a creek (whether or not it has been altered or modified);
- another natural watercourse (whether or not it has been altered or modified);
- a reservoir;
- a canal;
- a dam.
How do insurance companies determine my flood risk?
Insurance companies take into account information from range of sources which may include flood maps, ground elevation data, historical flood records and information about your building to determine the risk to your property from flooding.
Companies seek to use the most up-to-date and comprehensive information and update this regularly. Most companies now assess the flood risk to a property on a street address level, rather than postcode.
Some insurance companies will adjust your insurance price automatically as new information becomes available. Your insurance could increase or decrease depending on the new assessment of risk to your property. It is important to know that insurance companies may consider up to the Probable Maximum Flood (PMF) when assessing flood risk.
If you have a dramatic increase in the cost of your insurance this could be due to recent information that your property is at greater risk than previously perceived.
Remember you can ring your company for clarification or can change companies if you are unhappy with your provider.
If you are flooded...
If your property is flooded you may need to make an insurance claim. To do this you will need to ring your insurance company. If you don’t have your policy details or they have been destroyed in the flood, don’t worry, most companies can search for your policy with your name and address.
You need to:
- Take photographs and make a list of any items that have been damaged by the flood.
- Do not throw away anything that has been damaged, unless you have to because it is a risk
- Take reasonable steps to minimise further loss.
If you are covered for storm damage but aren’t covered for flood damage and you are flooded, you may have difficulty proving that damage is caused by water from a storm event rather than from flood. This is a very technical area and needs expert advice on where the floodwater came from and whether it was stored in a watercourse before entering your property.
If you are at risk of flooding, it is best to have flood cover in addition to storm cover to ensure that you are adequately covered for flood damage.
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