01 Jan Understanding Flood Cover

Understanding Flood Cover

When purchasing property insurance, it’s crucial to understand the specific risks your property faces. One significant threat is that of a flood, which can cause widespread damage and disruption.

The definition of “flood”

In 2012, the Australian Government regulated a standard definition of the word “flood” to provide policyholders with a consistency to which all insurers must comply. The definition of “flood” to be used in insurance contracts 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.

The standardised definition makes it clear that even if your policy excludes flood damage, your policy may still cover you for events such as storm or rainwater damage.  Though most insurers regard rainwater runoff as part of storm cover, some insurers won’t cover rainwater runoff or storm surge when the customer chooses not to take flood cover. These options are explained in the product disclosure statement for your policy.

Check your policy wording and talk to your insurance broker if you do not understand what you are covered for.

Am I covered for flood?

In residential/domestic policies, it should be noted whether flood cover is included on your quotation/policy schedule. For commercial policies, flood cover is not standard and has to be opted into, this will also be noted on your quotation/policy schedule.

Speak to your CRM Broker if you do not understand whether you are covered for flood.

What happens if I don’t have flood cover?

If you opted out of flood cover, did not opt in to flood cover, or your policy excludes flood, your insurer may still assess any claim you make to determine how your home was inundated. This may be required to establish whether other inclusions in your policy (cover for storm water run-off for example) can cover all or part of your claim.

If you would like to enquiry about the availability of flood cover for your property, speak to CRM Brokers today on 1300 880 494.

Important Notice

This information is provided to assist you in understanding some of the common considerations in flood insurance. It is not complete, so please request full details from your CRM Broker.  Deductibles, exclusions and limits apply.  Insurance policies issued by various insurers often differ.

This article provides information rather than financial product or other advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the Product Disclosure Statement (‘PDS’), Target Market Determination (‘TMD’) and Financial Services Guide (‘FSG’), which can be obtained by contacting CRM Brokers or downloading it from the agency’s website before deciding to acquire, or to continue to hold, this product.

Information is current as at the date the article is written as specified within it but is subject to change. CRM Brokers make no representation as to the accuracy or completeness of the information. Various third parties have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of CRM Brokers.