Floods and Home Insurance

Before I start I just want to say how sorry I am about all that are affected, especially those that have lost loved ones. To donate to the Premiers Disaster Relief Appeal go to http://www.qld.gov.au/floods/donate.html

Now that the waters have subsided and the clean up has begun the talk now is of who pays for the damage. What I think is natural is people turn to insurance companies. Well that is what they are there for. Insurance is the transfer of risk from one party (in this case a home owner or renter) and to another (insurance company). So shouldn’t they pay? Well .. maybe. Insurance companies pay for what has been agreed to within the scope of the policy purchased. Makes sense … You look at your risks and get a policy to cover what you are not willing to cover or ‘self insure’.

What has surprised me is what is being reported now of the high number of policies being offered without flood cover and the high number of people affected by the Queensland and Northern NSW floods that have chosen have these policies. By not taking out flood insurance they were in effect ‘self insuring’ for such an event. I wonder how many people really understood that. This might be something that comes out with an inquiry. I agree that the insurance policies need to be overhauled in Australia. IMHO … I think they should have to specify on a number of key insurable events with universal definitions a simple and universal coding system (with some nice clean icons) to show what level of cover you are getting. Make it really easy to identify what you are buying cover for and therefore also what you also aren’t. But I digress …

So I thought I would do a look around the internet and see what I can find out from the websites of the major home insurers for NSW and Qld what is cover re: flooding.Please note this is for information purposes only and is not meant as financial or insurance advise. You need to talk to a expert that can tailor advise to your circumstances. Also if you see anything that is incorrect … please let me know.

For an in depth review have a look at the Choice Review of Home Insurance

Here is what I have been able to find

• AAMI – http://www.aami.com.au/

AAMI Home Insurance does not cover flood.

http://www.aami.com.au/customer-service/insurance-glossary.aspx
Flood – Means the inundation or covering of normally dry land by water which: escapes or overflows from, or cannot enter, because it is full or has overflowed, or is prevented from entering, because other water has already escaped or been released from it, the normal confines of any watercourse or lake, including any that may have been modified by human intervention, or reservoir, canal, dam or storm water channel. Flood does not mean storm water run off from areas surrounding the site or water escaping from any water main, pipe, street gutter, guttering or surface. AAMI Home Insurance does not cover flood.

• Allianz – http://www.allianz.com.au/

Allianz Home Insurance does not cover flood.

Allianz does not cover loss, liability, injury or damage:
1. caused by or arising from:
• flood, or
• flood water combined with run-off and/or rainwater;
“flood” means the inundation of normally dry land by water that has escaped or has been released from the normal confi nes of any natural watercourse, lake or lagoon whether or not altered or modifi ed, or of any reservoir, canal or dam.
2. caused by or arising from action of the sea, high water, tidal wave or tsunami;

• AMP – https://www.amp.com.au/

AMP has automatic Flood Cover
AMP automatically covers loss and damage caused by storm and flood e.g. rain, wind, hail, storm and damage caused by flooding from rivers, streets and canals.

AMP doesn’t cover for damage by actions or movements of the sea

but we will cover damage caused by:
› a tsunami
› storm surge if it occurs at the same time your home or contents are damaged by a storm or flood
› retaining walls, garden borders and free standing walls
› the surface of a tennis court
› wharf, jetty, pontoon or sea wall
› water in a tank, swimming pools or spas or their liners or covers
› the cost of cleaning mud or debris out of tanks, swimming pools or spas
› damage to swimming pools and their parts or underground tanks caused by water leaking down the sides, against the sides, or getting underneath them
› paint when there is no structural storm damage to other parts  of the home
› gates, fences or wall fences that were in a state of disrepair which would have been obvious to a reasonable person before the damage occurred.

• GIO – http://www.gio.com.au/

GIO has automatic Flood Cover

GIO automatically covers for Loss and damage caused by storm and flood e.g. rain, wind, hail, storm and damage caused by flooding from rivers, streets and canals.

GIO doesn’t cover for damage by actions or movements of the sea
but we will cover damage caused by:
› a tsunami
› storm surge if it occurs at the same time your home or contents are damaged by a storm or flood
› retaining walls, garden borders and free standing walls
› the surface of a tennis court
› wharf, jetty, pontoon or sea wall
› water in a tank, swimming pools or spas or their liners or covers
› the cost of cleaning mud or debris out of tanks, swimming pools  or spas
› damage to swimming pools and their parts or underground tanks caused by water leaking down the sides, against the sides, or
getting underneath them
› paint when there is no structural storm damage to other parts  of the home
› gates, fences or wall fences that were in a state of disrepair which would have been obvious to a reasonable person before the damage occurred.

• RACQ – http://www.racq.com.au/

RAQ does not cover flood unless they have agreed and it is shown on your certificate of insurance.
They do cover for storm and flash flood and stormwater run-off (a sudden flood caused by heavy rain that fell no more than 24 hours prior to the flash flood or stormwater run-off)

• NRMA QLD – http://www.nrmaqld.com.au/

NRMA Queensland does loss, damage, injury or death that occurs as a result of flood

• NRMA NSW, ACT & TAS – http://www.nrma.com.au/

NRMA NSW, ACT & TAS has automatic Storm & Flood Cover

Photo by Kelly Sikkema on Unsplash