Flood insurance

2011 Flood Woogaroo St Goodna looking across from Gailes.
Determining if You Are Covered For Flood - Consumers with property and contents insurance, who may be at risk of flood damage, should review the terms and conditions of their cover by reading their Policy Disclosure Statement (PDS). 

Characteristically, restrictions on policy cover are listed as exclusions which detail the circumstances under which cover is not applicable. Flood insurance is now available in Australia for many locations (where flood mapping has been made available to the insurance industry). 

The cost of cover is typically proportional to the risk of flooding in your location and the value of the assets you seek to protect. If in doubt make contact with your insurer to clarify the extent of cover currently held and your insurance needs. 

Don't assume you are covered - Read your policy and if unsure discuss the extent of your cover with your insurer.

Determining the Risk to Your Home - Flood maps are available for most Australian communities that primarily focus on rivers and creeks. In some cases these maps also cover historical localised flooding due to overtaxed drains, etc (flash flooding). In many regional areas Australian governments and other agencies have studied, analysed and modelled the risks by producing flood maps showing areas of inundation for 1:100 year flood events. Whilst the style and content of these maps may differ they will all classically focus on highlighting geographic areas generally referred to as “flood zones or flood overlays”, simply meaning those places at greatest risk of flood. The zones and overlays identify areas that have been flooded in the past, or are predicted to flood in the future. History shows approximately 80 percent of all flood loss occurs within these areas.

Protecting Your Home if Subject to Flood Risk - Apart from choosing to not establish a home in an area of known flood risk - the most prudent prevention method – there are personal flood mitigation actions that can be taken that may reduce the level of impact experienced during a flood.

Consumers in a known flood zone or overlay should familiarise themselves with their Local Councils emergency management plan or any flood awareness material provided by your local council, floodplain management authority or state emergency service agency for information that will help protect both yourself and to some extent your property.

Consumers can also familiarise themselves with flood preparation guidance offered by Emergency Management Australia www.ema.gov.au

If your assets are at risk of flooding you should consider a policy that covers flood damage.

To determine if there is a flood risk to your property consumers should approach your Local Council or floodplain management authority and ask if your property is known to be affected by flooding. Many States require Local Councils to develop and implement natural hazard and environmental information as part of development controls. Some States also require this information to be provided as part of various property purchasing processes in an effort to ensure that consumers are made aware of any latent risks with the property in question. 

If, as a consumer, you have not been given flood risk information as part of your State’s property purchasing process you should seek out the Local Council and/or floodplain management authority and request whatever information is available. Consumers should be aware that many factors can influence the accuracy of flood mapping including building development, road works, new agricultural growth, changes to river & creek catchments as well as changes to drainage and sewer arrangements for your area.

Frequent re-familiarisation of the risks through engagement with your local council and/or floodplain management authority is essential.

How do Insurers Determine the Flood Risk to My Property? - Development and maintenance of flood maps and how they impact upon the built environment is a responsibility of local government and/or floodplain management authorities in each of the states. In some instances there are highly accurate flood maps made available to the community and industry, upon which reasonable risk decisions about the risk can be made. In other instances no flood mapping is or can be made available, leaving a situation where local communities and insurers are unsure of the extent of the risk.

In partnership with each of the State Governments, the general insurance industry has developed and licensed the National Flood Information Database (NFID). NFID is an address database containing 11.3 million property addresses, overlayed with the known flood risk according to government flood mapping.
The vast majority of properties in Australia have little or no flood risk. Approximately 2.8% of
properties have some risk of flooding. 

NFID is used by insurers to determine the flood risk to individual properties. Presently, not every flood prone area in Australia is covered by the NFID. Some local governments and agencies have yet to release flood mapping for their jurisdictions. Where flood information has not been released by government constituents will have very limited choices regarding flood insurance.

Originally published by the Insurance Council of Australia: