This fact sheet is one of a series that looks at the steps you can take to give yourself the best chance of fixing or replacing your property and belongings if they're damaged or destroyed in a natural disaster, such as a bushfire, flood or storm.
See Fact Sheet 18: Glossary for definitions of words and terms that are in bold text.
To find other fact sheets in the series go to www.InsuranceCheckup.tas.gov.au.
About storms
Storms affect all parts of Tasmania and can happen anywhere and at any time of the year.
Severe storms can cause flash flooding, major damage to trees, buildings and powerlines, and be accompanied by torrential rain, strong winds, large hailstones and lightning.
Storms are one of the most costly natural disasters in Australia, causing extensive damage each year.
About floods
A flood is where water lies across ground that is normally dry and can occur within a few minutes or hours of heavy rainfall, or when a creek or river breaks its banks. Flooding can also occur after several days of heavy rainfall once the ground becomes saturated or after a dam or levee failure. It may also occur when these events happen in another locality, resulting in the movement of water from one place to another.
A flood can affect just a small area (such as a single suburb) or a much larger area.
Depending on where you live, you may have an increased risk of losing or damaging your home and/or belongings if a flood comes your way (see Fact Sheet 3: Risk and natural disasters).
Rain, storms and floods – what's the difference?
It can be difficult to understand what insurers mean by different terms. Exact definitions will vary from insurance policy to insurance policy, but some common ones include the following:
- Rainwater – rain that falls naturally from the sky onto buildings or the ground.
- Rainwater run-off – rainwater that has collected on or flowed across ground that is normally dry, or which has overflowed from a swimming pool or spa.
- Storm – strong or violent winds (including cyclones and tornadoes) or thunderstorms, which might be accompanied by hail, rain or snow.
- Storm surge – an increase in sea level because of an intense storm or cyclone and associated waves (it doesn't include sea action caused by normal tidal movements like high tides or king tides).
- Flash flood – floodwater that is produced by high-intensity but short-duration storms that produce localised flood conditions.
- Flood – the covering of normally dry land by water that has escaped or been released from the normal confines of a lake, river, creek or other natural water course (whether or not altered or modified) or any reservoir, canal or dam.
What can get tricky, insurance-wise, is working out which definition applies to a particular event. For example, heavy rain from a storm might cause water to escape from the normal banks of a river, but once it has done so, it is a flood. Sometimes the situation isn't very clear and specialists are called in to work out what has happened.
Getting clear about storm and flood insurance cover
It's important to be very clear about the cover you have under your insurance policy because different insurers treat damage from storms and floods in different ways. Although many policies will cover damage resulting from rainwater runoff (under storm cover), some won't cover this if you have chosen to opt out of flood cover.
Flood cover is treated in many different ways by insurers:
- some include flood cover as a compulsory part of taking out a household policy
- some have flood as a standard inclusion but let you remove it (this will lower your premium)
- some cover flood but only up to a certain amount, e.g. damage of $15,000 or less
- some offer flood cover as an optional extra (you'll pay a higher premium for this)
- some don't offer flood cover at all.
Thinking about the risk of storms and floods
Even if there has never been a flood in your area before, that doesn't mean you are not at risk. Flood risk is not just about an area's history of flooding. Other factors are taken into account, e.g. rainfall, the physical features of an area, actions taken to manage the movement of floodwater (mitigation), as well as changes to the landscape because of new developments. Remember, you don't have to be living right next to a river to experience flash flooding.
Knowing your flood risk is important when it comes to insurance because water damage clauses feature in many insurance policies. For example, you may not be covered if you live in a flood or storm-prone area and any damage after a disaster is due to your failure to maintain your gutters and roof. You may also need to buy additional cover if you live in a flood zone.
There are a couple of ways you can find out if you are in a flood-prone area:
- If you already have insurance, you can ask your insurer about your risk from natural disasters.
- Some local councils may have information about flood risk where you live. Check the Tasmanian Councils page on the Local Government Association of Tasmania's website at www.lgat.tas.gov.au or phone 03 6146 3740 to find out which council area you live in and its contact details.
Insuring against storms and floods – things to keep in mind
When you are looking at a particular insurance policy, read the Key Facts Sheet and Product Disclosure Statement to find out exactly what is covered. Ask the insurer as many questions as you need to in order to understand exactly what is included (inclusions) and not included (exclusions) under the policy (see Fact Sheet 13: Finding and comparing insurers and insurance policies).
Confirm exactly how much cover is offered and for what. Under some policies, even where flood cover is provided, loss or damage to some parts of your property might not be, e.g. retaining walls, gravel driveways, pontoons, jetties and bridges.
If your home/property is at the bottom of a slope, check that your policy covers the risk of flash flooding.
If you are looking to insure a coastal property, be aware that most policies don't cover actions of the sea or the future impact of climate change.
You will generally be covered if your home or belongings are damaged in a cyclone and your insurance covers storms. But you may not be covered for water damage that occurs during a cyclone; it will depend on whether the water damage has resulted from rainwater run-off or flooding.
Most home insurance policies also include cover for earthquakes and tsunamis. Earthquakes can sometimes trigger a tsunami, featuring a series of massive sea waves that can push inland with destructive force.
There are some very specific things to consider when insuring your home or belongings for flood, storm and water damage, and it is important that you understand and choose the cover that fits your needs.
Resources
For general information, and for calculators and other tools to help you manage your own insurance:
- Understand Insurance: www.understandinsurance.com.au
- Find an Insurer: www.findaninsurer.com.au
- Money Smart: www.moneysmart.gov.au
Important notice
This fact sheet gives you basic and general information only. It does not cover every situation or everything you may need to know about insurance. It does not take into account your personal circumstances. Make sure you carefully read Key Facts Sheets and Product Disclosure Statements. Ask your insurer as many questions as you need in order to understand how your insurance policy will work for you. Use other tools available to you and seek professional advice if needed.
Information in these fact sheets has been drawn from a number of publicly available Government and non-Government resources.
This project has been jointly funded by the Commonwealth and Tasmanian Governments under the Disaster Recovery Funding Arrangements.