When is a flood not a flood?

Flood cover is a major exclusion from most home insurance policies. Confusion arises the different terms insurers use to explain what they will and won't cover in relation to floods.

Most policies will cover rainwater run off. After that, it's a sliding scale of coverage if the damage has been caused by flash flooding of rivers, creeks, drains or heavy rains. Flooding without rain in your area and landslip due to storms are also events that are likely to be excluded from insurance cover. Be aware, too, that tidal flooding also may not be covered.

The definition of flood cover varies between insurers. In the event of flash flooding the source of the damaging heavy rain seems to be of paramount importance to insurers. Was the cause man-made such as a storm-water drain? Was it a creek or water-catchment system near your property or, worse still, was it rainwater mixed with flood water? How soon after the storm did the flooding occur?

There are 17,000 homes built in high risk flood areas, according to the Insurance Council of Australia. If you are in or near a flood zone, you may have difficulty obtaining flood cover. If you can get it, you may have to pay a surcharge or a flood excess, according to perceived risk by the insurer.

Those with property and contents insurance, who may be at risk of flood damage, should review the terms and conditions of their cover by reading the Policy Disclosure Statement (PDS). If in doubt, contact your insurer to clarify the situation.

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