Making sense of flood insurance
“Where did the water come from?” is the question insurance companies typically ask when you put in a claim for water damage to your home. Why? Because many home and contents policies don’t cover against flood.
Deciphering what is and isn’t covered in your policy can be tricky. A close look at some examples of the wording used by some insurance companies might be useful.
QBE’s cover includes storm, rain and flash flood (when lots of rain falls quickly in a short period of time and flows into your home). River flood is excluded. While this might imply rivers only, it actually means water normally contained in a water catchment system (river, creek, lake, dam, reservoir, storm water channel or canal), that “increases because of rainfall or snow melt and flows onto land that is not normally covered by water”.
NRMA’s cover includes storm and flood, where flood is, “water that escapes or is released from a body of water, including a river, lake, dam, stormwater channel or canal”. The definition of storm includes “sudden excessive run-off of water as a direct result of a storm” (so what we might call flash flooding).
Allianz’s cover includes damage from storm, rainwater or run-off (rainwater that has collected on or flowed across dry ground; so this includes flash flooding from excessive rain). Flood is excluded. Flood means when normally dry land is covered by water “that has escaped or has been released from the normal confines of any natural watercourse, lake or lagoon, whether or not altered or modified, or of any reservoir, canal or dam”.
CGU’s cover includes damage caused by storm, rainwater or wind. Flood is excluded. Their flood definition is very similar to Allianz’s. Interestingly though, no definition for “storm” is included in the policy, potentially allowing more scope for claiming.
Even if your policy doesn’t cover against flood, it may be that the damage to your home was caused by a combination of factors, such as a flood and a storm. You might be able to make a claim for part of the damage. But it depends on the wording. Allianz specifically state that they won’t pay for damage caused by flood water combined with run-off and/or rainwater.
Most policies exclude damage caused by actions of the sea (eg tidal wave). While Suncorp does cover for flood, this does not include damage caused by a mixture of sea movements combined with water from another source.
Keep in mind that policies that include flood cover will likely cost more, and that where you live affects your premiums. NRMA’s policy clearly states, “If we have identified that your home is prone to flooding then we need to charge you a higher premium.”
It’s all in the wording. Look closely, and shop around.