How do you file a home insurance claim for flooding?

If you have home insurance, you may be covered for flood damage to the structure of your home itself – foundations, walls, and so on.

If you have contents insurance, you may be covered for damage to the possessions inside your home, such as your furniture, appliances and electronics.

If you have home and contents insurance, your combined policy may cover both your home itself and the possessions inside it.

Depending on your insurer, and the policies you’ve taken out, you may be covered differently for floods than for other disasters. Flooding may be covered by default in your policy, or it may be specifically excluded, or it may be an optional extra to be selected.

Most insurance policies cover a specific list of insured events, each one with its own specific definition. According to the Insurance Council of Australia (ICA), Australian regulations include a standard definition of flood, which was introduced in June 2012:

“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.“

Even if you don’t have flood coverage, or have opted out of flood cover, you may still be covered for storm damage or other water damage. Water damage to your home or contents may be covered differently depending on if it was caused by flooding, storms, rainwater, run-off, or some combination of the above. Some insurers may define each of these in slightly different ways, which could affect what you may or may not be able to claim.

For example, water damage caused over time by a leaking bathroom pipe may not be covered (most insurers expect the homeowner to keep up with essential maintenance), but a flooded garage from stormwater overflowing from a nearby dam might.

Insurers may specifically exclude some types of flood events, such as acts of the ocean like tsunamis, which could be an issue for some beachfront properties.

Check your product disclosure statement (PDS) to confirm what your home and contents insurance policy does and doesn’t cover, and whether you’re covered in your situation. If you’re not sure, contact your insurer.

Some areas of Australia are more prone to flooding than others. If you live in an area that’s particularly prone to natural disasters that lead to floods (such as tropical cyclones), you may find that insurers won’t provide you with flood insurance by default – at least not without paying some very expensive premiums.

Insurers may adjust your home insurance premiums if your area’s flood risk changes. For example, in some areas of Queensland and New South Wales where multiple “once in 100 years” flood events recently occurred over a relatively short period of time, residents have reportedly seen massive increases to their insurance bills. 

Depending on your policy, you may be able to receive different benefits when you make a flood claim, including:

Repairs

If your home and/or contents are damaged but still usable following a flood, your insurer may be able to help pay for repairs to get them back into full working order.

Replacement

If your home’s contents are damaged beyond repair after a flood your insurer may be able to help cover the cost of replacing them. Depending on your policy, these may be new for old replacements, or you may be paid out a lump sum of a predetermined dollar amount to cover the cost of replacements.

Rebuilding

If your home has been rendered uninhabitable after a flood, your policy may be able to cover the cost of rebuilding the property.

Temporary accommodation

If you’ve been forced to move out after a flood while the damage is repaired, your insurer may be able to help cover the cost of this accommodation, whether it’s a short hotel stay or a longer-term rental property.

Stay safe!

Before claiming insurance, prioritise your safety and only return to your property once the emergency services have declared it safe to do so. You do not need to return to your property before contacting your insurer. Further, always wait for an electrician’s inspection before turning on your electricity if water has entered the property.

Document everything

Once it is safe to return to your property, you will need to immediately begin the process of documentation. If this step is too emotionally challenging, it could be worth asking a close friend or family member to help you with this step.

Documenting your insurance claim can involve:

• Taking photos and videos of damaged items and the property itself.
• Making a list of damaged or destroyed items. Try to include information about the date of purchase, made or model of these items if you can.
• Finding any receipts or warranties for items, as well as evidence of purchases in your bank account/credit card statements.

The insurer may send an assessor to review the damage to your property and belongings. This is not because they do not believe you, but to ensure no fraud is occurring from bad parties looking to take advantage of this disaster.

Making note of the damaged or destroyed items to the best of your abilities is also crucial if your insurer is offering to cover the cost of replacements. In some instances, the insurer will set a predetermined dollar value to items based on generic costs, and if you have not provided greater detail, you may receive a lower amount back.

For example, if your state-of-the-art television is destroyed but you have not denoted specific information about the make or model, you may only be provided with replacement funds to a lower-cost, less high-tech television.

Contact your insurer

Your next step is to pick up the phone and call your insurer. Don’t worry if you don’t have your documents with you, they should be able to locate your account through your personal details, like date of birth and surname,

Advise that you will be making a claim and that this situation has occurred, but you do not have all details right now (particularly if you cannot return to the property yet). The insurer may need to send an assessor to your property for your insurance claim, so this can help you to get the ball rolling. 

Wait for assessment

Once your claim has been lodged, you can keep in touch with your insurer to track the progress of your claim. The insurer should advise how long this process may take but try to be patient as the scope of the flood destruction is widespread.

Depending on your situation, the insurer may send an assessor to look at your property and quote for the repair costs. You can also obtain your own independent estimates for comparison, though your insurer may need to give consent before any work starts.

Start organising repairs and/or replacements

Your insurer may be able to help you find the products and/or services you need.

Your state government may also be able to provide financial assistance for flood-affected Australians, so if you are underinsured or do not have insurance, this may provide some relief.

Keep in mind that some of these grants may only be used to cover immediate needs, including emergency food, shelter, clothing, medication and accommodation. In cases like these, you may not be able to use these payments to cover other costs, such as insurance excesses. 

The exact grants and payments available to you may vary depending on the state government, the scale of the natural disaster, and other factors. Check the relevant government websites for details, as special grants and payments could be issued to help provide relief for specific emergencies:

• ACT
• NSW
• NT
• QLD
• SA
• TAS
• VIC
• WA

While never the ideal result, it is possible that your insurer may deny your claim, make you file multiple claims, or you may just be unhappy with the result they have offered.

In this instance, it may be worth lodging a dispute with the insurer. This should be taken to the insurers’ Internal Dispute Resolution (IDR) section. You can ask your insurer for the contact details of their IDR department, which hopefully may come to a more suitable solution. You may need to provide additional evidence or arguments to support your claim.

If this still doesn’t produce an ideal outcome, you may request a review by making a complaint with the Australian Financial Complaints Authority (AFCA). A determination made by the AFCA is final and binding for the insurer – if you agree with the decision.

If not, you could consider applying to the Civil and Administrative Tribunal in your state to begin a court case. In this instance it would be worth considering seeking further advice and support from a lawyer who can check your insurance cover and entitlements against the insurer’s policy.