Flood Insurance: Flood Cover for Home Insurance

About flood cover for home insurance

If you’re a homeowner in Australia, then it can be important for your peace of mind to know that your property is covered in the event of heavy rainfall—flood cover for home insurance could be a big component of this. Flood cover can be complex, however, and even if you do have home insurance, you may not be covered. Here’s how you can find out if your policy includes this cover, and what you can do to make sure you’re covered in the event of flooding.

What is flood insurance?

Flood insurance is a particular feature of certain home insurance policies that is intended to cover property owners for damage caused by what an insurer defines as flooding. Whether or not your home is covered for damage caused by a flood depends on a number of factors. These include the type of home insurance policy you have, and what is included or excluded in that policy. Flood cover could be:

• A standard inclusion—which means it’s included in the standard features of your policy for no extra charge.
• Available as an add-on feature—which means that you would have to ‘opt in’ for that type of cover and generally pay an extra fee.
• A notable exclusion—which means that it is not part of your policy and you don’t have the ability to add it on.

If flood cover is a standard inclusion, your insurance provider might even allow you to ‘opt out’ to lower your home insurance premiums.

Does flood insurance cover all types of floods?

Even if you do have flood cover as a feature of your home insurance policy, you may not be covered for every situation. Different insurance providers may use different terms to explain what they will and won’t cover in relation to floods, which can cause confusion when comparing policies, or when trying to figure out what you’re personally covered for. Your exact level of coverage will depend on your provider and policy.

Some providers specify limits on flood damage coverage, meaning the amount you’re reimbursed for as the result of a successful claim may not cover the full cost of repairing the flood damage to your house.

If you are unsure about what your current home insurance policy–or a new policy you are considering–covers in relation to flooding, you can check the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for more details, or contact your provider directly to clarify what is and isn’t covered.

If you’re renting and have contents insurance, you may want to check whether your policy provides cover for flood damage to your belongings, and if there are any coverage limits. Again, you can read the PDS and TMD for details. While it will generally be your landlord’s responsibility to ensure the building you live in is covered by either their landlord insurance or by the body corporate’s strata building insurance, this policy will not cover your personal belongings if they are damaged.

Is my home covered for flood damage?

When it comes to determining what is and is not a ‘flood’ for the purposes of home insurance, the place the water came from is likely to make a difference. To give you an idea of what’s generally available across the market, Canstar Research looked at the home and contents insurance policies on our database and found that the vast majority covered damage caused by ‘rainwater runoff’. Other events commonly covered as standard included:

• Flash flooding due to heavy rain
• Natural water course (e.g. river, creek) flooding
• Flooding due to a release from a catchment area (e.g. a dam).

Only a fifth of policies offered standard cover for flooding due to a storm surge, while none included cover for flooding due to rising seawater or tidal flooding, at the time of the review (January 2025).

Things become slightly more complex when damage is caused by the flash flooding of rivers, creeks, drains or heavy rains. In the event of flash flooding, the source of the water seems to be what’s important to insurance providers. Where flooding or damage is attributed to a storm, another question providers may ask is how soon after the storm the flooding occurred. Even if your home and contents insurance doesn’t cover flood damage, you may still be covered for damage caused by storm or water damage.

It’s important to read the information provided by your insurance provider in the PDS, and to clarify what is and is not covered in the event of any type of water damage.

What does flood insurance cover?

What is and isn’t included in flood cover for home insurance will ultimately depend on the policy. The two types of home insurance, being home building insurance and contents insurance, will provide cover for different things, often with limits and sub-limits applying. Some general inclusions for flood insurance are:

Flood cover for home building insurance inclusions

• Structural damage, such as to walls, floors and ceilings
• Costs associated with demolishing and removing debris (if necessary)
• Damage to fixtures like built-in wardrobes, kitchen cabinets and plumbing
• Damage to permanent structures, such as garages and sheds
• Repair or replacement of electrical systems, such as wiring, air conditioning and switches
• Temporary accommodation—if your home is unlivable due to flood damage.

Flood cover for contents insurance inclusions

• Damage to furniture, rugs and carpets
• Damage to electronics, such as TVs, appliances and computers (if damaged beyond repair)
• Damage to clothing, linen and other personal items.

Some contents insurance policies may also cover high value items like jewelry and artworks, but claim limits will generally apply.

What does flood insurance not cover?

What is excluded from flood cover can vary between polices, but some common exclusions can be:

Flood cover for home building insurance exclusions

• Damage caused by gradual water seepage or rising damp—which can often lead to mould growth or structural damage
• Damage caused by rising seawater or tidal flooding
• Damage to swimming pools and their associated systems (i.e. filtration systems, pool pumps, solar heating)
• Damage to retaining walls and some other external structures
• Damage to fencing and gates, landscaping, plants, outdoor areas and driveways (this can vary depending on the policy)
• Damage due to stormwater runoff, depending on how the insurer distinguishes between storm and flood-related damage

Flood cover for contents insurance exclusions

• Losses due to mould, mildew or gradual water damage
• Loss of cash, collectibles and antiques (unless specified in your policy)
• Damage to items stored in non-secure areas (i.e. sheds or underneath the house)
• Damage to vehicles, such as cars, motorcycles and boats (a separate insurance policy like car insurance might provide cover for damage caused by flooding)

Can you add flood cover to your home and contents insurance?

If your insurance policy does not include flood cover as standard, you may be able to add it as an optional extra, either by updating your policy through your insurance provider’s online portal, or by contacting them directly. If you do this, there are a few things to keep in mind.

Firstly, the cost of your premiums is likely to increase, and secondly, the cover is unlikely to kick in immediately—meaning you’ll need to wait for a certain amount of time (an exclusion period) before being covered. If you are considering adding flood cover to a home insurance policy, then it’s important to confirm any relevant exclusion period with your provider.