Flood insurance: Does my home insurance or car insurance cover flood damage?
Some insurance providers use different terms when discussing what they cover when it comes to floods and flood damage. Here’s an overview of flood insurance, and how to figure out whether or not your home and car are covered for flood damage.
Is my home covered for flood damage? Do I have flood insurance?
Whether or not your home is covered for damage caused in a flood depends of 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 is 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 pay an extra fee
- a notable exclusion, which means that it is not part of your policy and you cannot add it on.
Compare Home & Contents Insurance with Canstar
If flood cover is a standard inclusion, your insurance provider might even allow you to ‘opt out’ to lower your home insurance premiums.
There are other things that could impact flood cover, such as:
- Some providers specify limits on flood damage coverage, meaning the amount you’re reimbursed by as the result of a successful claim may not cover the full cost of repairing the flood damage to your house.
- Where the water came from is also likely to make a difference when it comes time to claim.
- 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.
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 damaged 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 release from catchment area (e.g. a dam).
Only a small portion of policies offered standard cover for flooding due to a storm surge, while none included cover for flood due to a rise in seawater, or for tidal flooding.
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 damage or water damage.
If you are unsure about what your current home insurance policy, or a new policy you are considering, covers in relation to flooding, check the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the details, or speak to your provider to clarify what is and isn’t covered.
→ Related story: What to do in a storm
If you are renting and have contents insurance, you may want to check whether your policy provides cover for flood damage to your belongings. Again, you can read the PDS and TMD for details. 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.
Compare Home Insurance with Canstar
If you’re comparing home insurance policies, the comparison table below displays some of the policies currently available on Canstar’s database for an Australian aged under 50, seeking cover in NSW or the ACT which offers flash flooding cover. Please note the table is sorted by Star Rating (highest to lowest), followed by provider name (alphabetical) and features links direct to the providers’ websites. Consider the Product Disclosure Statement (PDS) and Target Market Determination (TMD), before making a purchase decision. Contact the product issuer directly for a copy of the PDS and TMD. Use Canstar’s home insurance comparison selector to view a wider range of policies. Canstar may earn a fee for referrals.
Products displayed above that are not “Sponsored or Promoted” are sorted by Star Rating and then alphabetically by company. Canstar may receive a fee for referral of leads from these products. See How We Get Paid for further information. If you decide to apply for Home Insurance or Contents Insurance, you will deal directly with an insurance provider, and not with Canstar.
Consider the provider’s detailed product and pricing information before making a decision to purchase a policy. The products displayed on this page do not include all providers and may not compare all features relevant to you. View the Home Insurance Methodology and Report. The Star Rating shown is only one factor to take into account when considering products.
Is my car covered for flood damage?
Your car may or may not be covered for flood damage, depending on your insurance provider and the type of car insurance policy you hold. Generally speaking, car insurance providers will provide flood cover as part of comprehensive car insurance product(s).
24/7 Phone & Online Claims.
Budget Direct - Insurance Solved.
Increasing Your Basic Excess (Within A Given Range)*
Lodge A Claim Online 24/7
Hire car cover for not at fault claims
$1,000 personal property cover
Canstar may earn a fee for referrals from its website tables, and from Sponsorship or Promotion of certain products. Fees payable by product providers for referrals and Sponsorship or Promotion may vary between providers, website position, and revenue model. Sponsorship or Promotion fees may be higher than referral fees. Sponsored or Promotion products are clearly disclosed as such on website pages. They may appear in a number of areas of the website such as in comparison tables, on hub pages and in articles. Sponsored or Promotion products may be displayed in a fixed position in a table, regardless of the product’s rating, price or other attributes. The table position of a Sponsored or Promoted product does not indicate any ranking or rating by Canstar. For more information please see How We Get Paid.
Who can I contact for advice about flood insurance?
If you are affected by a flood and need assistance in understanding your insurance policy, or have queries about how the claims process works, you can speak to your provider, call the Insurance Council of Australia (ICA) Catastrophe Hotline on 1800 734 621, or visit the ICA website.
Is flood cover mandatory?
No, home and car insurance providers have no obligation or requirement to provide cover for flood. Following the 2011 Queensland floods, the federal government put forward the idea of making flood cover a mandatory part of insurance policies, and specified a new, standard definition of a ‘flood’. According to the Australian Government, 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 lake, or any river, creek or other natural watercourse, whether or not altered or modified; or any reservoir, canal, or dam.”
Flood cover was not made mandatory, so it’s not legally compulsory for insurance providers to include flood cover in their policies.
Many insurance companies now only offer policies that do include flood cover, which has seen home insurance premiums increase in certain areas. Before committing to a particular policy, you may want to consider how flood-prone your area is, and whether or not getting flood cover as part of your policy is worth paying a potentially higher premium.
→ Related story: How much home and contents insurance do you need?
Is my home at risk of flooding?
You can check the Australian Government’s Flood Risk Information Portal to estimate the risk of flood for your home. This portal has been developed by the state and territory governments, in tandem with the insurance industry. It includes flood maps and flood studies, as well as details for surface water observations analysed with satellite imagery.
According to Geoscience Australia, just because an area has not flooded in the past, does not mean it will not flood in future. Similarly, areas that flood during one event may not necessarily flood during later events.
How can I find a good deal on flood insurance?
To find a high-value policy when looking to insure your property against floods, it can be a good idea to shop around. As flood cover is sometimes not included within home and contents insurance or even car insurance, it’s important to check exactly what your policy covers you for.
If you are in or near a flood zone, you may have difficulty obtaining flood cover, or have to pay a surcharge (a higher premium) or a flood excess (an amount charged if you make a claim), depending on the perceived risk level. However, since different providers may classify flood risk differently, it could be worth comparing your options.
Again, this means it may be worth shopping around for an affordable price on the level of cover you need.
When choosing a home insurance policy with flood cover, you may want to check if it offers enough cover to completely repair or rebuild your home after a flood. Two common types of home insurance policies in Australia are:
- Total replacement policies. The insurance provider pays you the cost of repairing and/or rebuilding your home to the same size and standard of what it was prior to the damage.
- Sum-insured policies. This type of policy offers you a set amount of money in the event of a successful claim. This type of policy can incur lower premiums depending on the pre-agreed sum-insured amount, but if underestimated, the payout may not necessarily be enough to cover the full cost of repairing your home.
If you’re considering your flood insurance options, it could be worth reviewing the terms and conditions of your cover by reading the PDS and TMD. If in doubt about whether you’re covered for flood or not, you may want to contact your insurance provider to clarify the situation.
Compare Home & Contents Insurance with Canstar
Originally written by Ellie McLachlan. Cover image source: SpeedKingz/Shutterstock.com
Thanks for visiting Canstar, Australia’s biggest financial comparison site*
This article was reviewed by our Sub Editor Jacqueline Belesky before it was updated, as part of our fact-checking process.
Sean Callery is a former Deputy Editor at Canstar. When at Canstar, he and his team covered just about every finance and lifestyle topic under the sun, from property to budgeting to the nitty-gritty of financial products like home loans, superannuation, and insurance. Sean has written and edited hundreds of finance articles for Canstar and his work has been referenced far and wide by other publications and media outlets, including Yahoo Finance and 9News.
Sean has accumulated more than a decade of international experience in communications roles – in Australia, the UK and Ireland – across finance, banking, consumer and legal affairs, and more. His work as a journalist has featured in various publications and media outlets, including the Drogheda Independent, the Law Society of Scotland Journal and Ireland’s national broadcaster, Raidió Teilifís Éireann. Before joining Canstar, Sean oversaw content at Great Southern Bank (formerly CUA), one of Australia’s biggest member-owned financial institutions. He has a Bachelor’s Degree in Journalism (Dublin City University) and a Masters Degree in Creative Advertising (Edinburgh Napier University).
Follow Sean on LinkedIn or on Twitter and Canstar on Facebook. Meet the Canstar Editorial Team.
Try our Home Insurance comparison tool to instantly compare Canstar expert rated options.
SPONSORED
Save Big on Home & Contents
- Canstar Outstanding Value Home & Contents 2017-2023 Winner
- Guaranteed authorised repairs
- What’s old is new again with our New-for-old replacement
- Optional flood cover.