Recent severe weather events have shown that practically no one is safe; so is your home covered against flood?
A couple of weeks ago I was caught up in the torrential downpour of rain that hit the east coast of Australia. I live on the NSW Central Coast and was affected by the storm which hit my neighbourhood with full force – unrelenting rain, strong wind, flooding and no electricity were my unforeseen reality that week.
It was a relief to get our power restored after seven days and I was grateful my friends and family remained safe throughout. Sadly, not everyone was as lucky with the storms causing devastation across the state, and the NSW Premier declared the storm a natural disaster.
This got me thinking about my own home and contents insurance. The last thing I needed to be paying for was a repair to my house or replacing contents within it.
So I did a bit of research and have collated some insurance tips that I hope you’ll find helpful.
1. Are you buying into or do you live within a floodplain?
I knew we had bought into a floodplain six years ago, but apart from the tell-tale signs like living within mere metres from Tuggerah Lake and all the neighbourhood homes built to the same height above ground level; I couldn’t remember how I knew that.
A quick browse of the Australian Flood Risk Portal and a call to my local council taught me that some states must inform buyers about the risk of floods relating to the property they are buying. In NSW, every property registered for sale has a ‘Section 149 Certificate’ attached to it. A ‘Section 149 Certificate‘ includes information specific to the property in question and more importantly outlines if the property is in a floodplain.
TIP! Your local council is responsible for flood mapping within your city or suburb; they’ve been collecting data on floods within your region for many years. Make sure you tap into their resources to understand flood risk as it specifically relates to your property.
2. Does your local council and your insurer have the same definition of a floodplain area?
All that flood data your local council has been collecting for years, in addition to all the results from flood studies and waterway investigations, help the council produce flood maps which show floodplains within their shire or city.
Your insurer, on the other hand, takes a slightly different perspective. Insurers need to consider the risk of offering you flood cover, whether they will accept this risk and at what cost.
3. Do you understand the terminology?
What’s a 1% AEP flood event? What’s a floodplain? Flood terminology used by both your local council and your insurer isn’t the type of terminology homeowners would be familiar with, but it helps to understand a few key terms.
A floodplain, put simply, is an area at high risk of flooding. Councils in NSW use a benchmark for flooding probability called the 1% Annual Exceedance Probability (AEP), otherwise known as a 1 in 100 years flood event. If you’re in NSW, you can access this measurement from your local council. It is designed to help you understand the probability of flooding in a particular place within a particular timeframe.
A simple google search can return results for flood terminology local to you or you can just as easily browse your local council’s website. A phone call to them can also help educate you on the appropriate flood terms and measures that apply to your property or area of interest.
4. Do you understand how living in a floodplain affects your insurance premium?
Not all insurance providers will offer protection against flood damage because some may deem the risk too great. Other insurance providers, like Aussie, will allow you to choose an optional benefit of flood cover if you fall within the insurer’s guidelines and they accept your cover. Living in a flood zone will impact the cost of your insurance premium because the insurer is taking a higher risk by providing cover for your property. The cost of cover is directly linked to the risk and likelihood of flooding occurring at your property. It’s smart to shop around and to research how you can tailor a policy to suit your needs.
5. Do you clearly understand the definition of “flood” within your policy?
The definition of flood can vary between insurance providers. Be sure to read the Product Disclosure Statement (PDS) for the policy you’re interested in. Make sure the insurer’s definition of flood matches what you need protection against. You can find out how Aussie defines ‘flood’ on our FAQ page.
TIP! If there is anything you don’t understand in your PDS, contact your insurer and ask them to explain it to you.
6. Do you know how to make an insurance claim?
Again, this will vary between insurance providers. If you’re an existing Aussie insurance customer or thinking of taking an Aussie insurance policy you can read how to make an insurance claim on our website. It’s a fairly simple process and you can normally find this information on your insurer’s website or give them a call and get them to explain it to you.
As the east coast of Australia has recently witnessed; storm and flood can wreak havoc and cause some very expensive damage, so it’s better to be prepared and protect yourself now before it’s too late.
Over to you! Have you experienced flood damage? Do you have any tips for others that are living in a flood zone on how to protect themselves? Please share your thoughts in the comments below.