From water damage to drowned debt

Forget being up-creek with no paddle. Where you really don't want to be is below floodwater with no insurance.

Standing in your living room, you realise that your socks are probably the only dry things in your house. You can still faintly see the footsteps you squelched into the carpet behind you.

The creek two blocks down from your house looks normal now, if a little murky with debris. Your street outside is mostly back in order; there are only a few of your neighbour's recycling bins still marooned on the curb by the receding flood waters. The white façade of your house now has a dark line stained at the half-metre mark like the wall where your sister tracks her kid's heights.

You didn’t think the storm would be that bad or that the creek could rise that high. You weren’t prepared for this.

Pulling out your phone, you look up flood insurance for your area as your socks inevitably grow soggy.

Flood insurance can be expensive, but flood damage can cost you even more. The most important question to ask is — do you need it?

First, you should understand the basics of flood insurance, and then our expert Insurance Advisors can help find the best policy for you.

Insurance Coverage

Non-standard inclusion

The last few years have seen many changes to weather patterns and increases in disaster events frequently in the news. California Burns While Queensland Floods wouldn’t be shocking in headlines today. Unfortunately, however, the increase in large claim losses during that time has also affected bottom lines.

Many insurers no longer offer flood insurance as a result. Because it’s not mandatory, if flood insurance is available in your area, it may be expensive.

If you have flood cover, it will pay for the cost of rebuilding your home or business and the loss or damage to contents and stock. Loss of business income can also be covered by paying for fixed costs and overheads in case you can’t trade while rebuilding or restocking.

Important: if your insurance covers flood exposure, it’s important to check if your policy also includes flood cover.

Flood definition

To avoid confusion, Australian insurers have only one way to define a flood.

‘Flood’ refers to water that has escaped or been released from lakes, rivers, creeks, canals, dams, or reservoirs.

In that capacity, damage from a blocked drain, for instance, won’t make the classification. However, water damage to your property from the overflow of a nearby risen creek will.

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Policy wording

Some home, contents and personal effects insurance policies have standard wordings included in them. However, they can be changed to offer more or less coverage by your insurer. If an insurer changes a standard wording, they must let you know what's being changed, so make sure you read any updates carefully.

Other types of insurance, such as personal or business, don’t include standard policy wordings. In these cases, it’s important to read the Product Disclosure Statement policy wording to avoid any gaps in your cover. You can also talk to an insurance professional who can review your policies and help you get the right cover for your needs.

Premiums and Risk Factors


Is your property in a high-risk flood area? Your cover and premium are primarily determined by the likelihood of flooding (and the resulting claims).

Properties located in flood zones typically can’t buy insurance or, if they can, have far higher premiums.

Flood mapping

Insurance is often something people think about after they buy. Flood insurance can often require a little more planning so you’re not left high and dry — or in this case, maybe so you are.

Insurers use a combination of local council, state or territory government data, and specialist consultants to assess the risk of flooding in a specific location. This data takes into account not only topography but also historical flood events and claims.

Claims and Settlements

Immediate reporting

Don’t give yourself more red tape to wade through along with the water — report the damage as soon as possible to your insurer or insurance advisor.

An insurance assessor might not be able to visit your property immediately to review its condition. It’s important to take photographs and keep damaged goods or property until they arrive.

Settlement process

The assessor will report on the damage, whether it was a flood or not, as well as the extent of the damage, to your insurer. They’ll also provide estimates for the cost of repairing or replacing your goods or building.

If you have property in an area that could be impacted by storms or floods, it's crucial to understand the risks associated with its location, the specifics of your insurance policy, and your responsibilities during the claims process.

Consulting with an insurance professional will ensure that you’re getting the right advice and insurance cover specific to your needs.

Our expert Insurance Advisors won’t leave you high and dry when the flood waters recede. Contact us today to ensure you’re covered and claimed instead.

About The Author

Andrew is the Director of Cutcher & Neale’s General Insurance division. He has been an advisor in the industry for over 20 years ensuring his clients have the best value and personalised coverage possible.

Andrew has worked in many areas of insurance, including domestic and international brokering. His specialties cover personal and business insurance, medical professionals, residential and commercial real estate, sports, and construction.

The information in this publication contains general advice only. It has been prepared without taking your personal objectives, financial situation or needs into account. You should consider whether the information contained within this publication is appropriate for you. Where we refer to a financial product you should obtain the relevant Product Disclosure Statement or offer document and consider it before making any decision about whether to acquire the product.