Home insurance typically protects your home and its contents from accidental, sudden damage caused by weather, burglary, fire, etc. There are specific inclusions and exclusions which vary from provider to provider, and it is important that you check your insurance policy at the time of purchase.
Flood insurance is one such cover that is included in most policies as a standard, but there could be exceptions, or in some cases, you might need to add it by paying an additional premium. A few insurers could also use different terms when discussing home and flood insurance and what it covers.
How do I get flood cover in my home insurance?
Water can cause massive damage to your home and its contents, irrespective of whether it is a flooding river, a burst water pipe or a storm. It’s essential that you understand the different types of floods and water-related accidents and how they’re covered under most insurance policies.
While most insurers do include flooding in their policy, in some cases you might need to pay extra to get the cover. Moreover, some insurers could have a cap on flood damage coverage, which means the amount you’ll be reimbursed after a successful claim may not cover the full cost of repairing the damage caused to your property. A few insurers could even allow you to ‘opt-out’ of flood cover to lower your home insurance premiums.
How much cover will I get with home and contents flood insurance?
The exact level of flood coverage on your home and contents insurance will depend on your insurer and the policy. While some insurers include cover for flash floods due to heavy rain, some also offer cover against flooding from a river or creek due to heavy rain. Most policies include cover for damage caused due to rainwater runoff (flooding because of heavy rainfall and inadequate drainage), but not many insurers have cover for flood due to a rise in seawater or tidal flooding.
In the event the damage is caused by the flash flooding of creeks, rivers, drains or heavy rains, insurers focus on the source of the water at the time of considering your claim. If the flooding or damage is because of a storm, insurers will often want to know how soon after the storm did the flooding occur.
Even if your home and contents insurance doesn’t state cover from flood damage, you may find that you are covered for losses due to storm damage or water damage. Do check with your insurer to confirm.
If you are renting your property and have contents insurance, it might be well worth your time to check the policy disclosure statement if you are covered for flood damage. Talk to your landlord and verify that the building you live in is covered, either by landlord insurance or by strata building insurance.
How can I get a good deal on flood insurance?
It’s best to shop around and compare home and contents insurance with flood cover when you’re looking for a high-value policy. Since not all policies include flood cover automatically, it’s important that you check exactly what your policy covers.
If your home is in or close to a flood zone, not many insurers will be willing to offer you flood cover, or you might be required to pay a surcharge (a higher premium) or a flood excess (a sum of money charged if you make a claim), depending on the level of risk as perceived by the insurer. However, since different insurers might classify flood risk differently, you could talk with a number of providers and get a home flood insurance quote before finalising one.
Is home and flood insurance mandatory?
No, home insurers are under no obligation to provide cover for flood in their home insurance policies. After the 2011 Queensland floods, the federal government floated the idea of making flood cover compulsory for insurance policies and offered a new, standard definition of a ‘flood’.
- According to the Australian Government, a flood is: ‘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; or any reservoir, canal, or dam.’
However, flood cover was not made mandatory, and hence insurers are not legally bound to include flood cover in their policies. There are a few insurance companies that now only offer policies that include flood cover, which has raised home insurance premiums in certain areas. Before signing on the dotted line, consider how flood-prone your area is, and whether getting flood cover as part of your policy is worth the potentially higher premium.