Storms, floods & fires

Natural disasters and your home insurance

Having your home damaged or destroyed in a natural disaster is devastating. Here is how you can find out if your home is in a natural disaster prone area and work out if you have adequate insurance cover for all types of natural disasters.

Get adequate insurance for natural disasters

There have been many serious floods, fires, cyclones and storms in Australia over the last few years and many people have found out too late that they did not have enough insurance cover on their home. This can be extremely costly and stressful, if you lose your home.

Wherever you live, your home insurance cover needs to be enough to cover the cost of rebuilding your home.

It is estimated that 13% of homes that required reconstruction or significant repair after the 2009 Victorian bushfires were not insured. See the Royal Commission's report on the Victorian bushfires and ASIC's reports on getting home insurance right - a report into underinsurance and making home insurance better.

Increasing your insurance cover may not cost very much, and if you shop around you may even be able to get more cover for a lower price. See more on the risk of underinsurance.

Find out if you live in a disaster prone area

To find out if you are in a natural disaster prone area you should contact:

Ask them about flood mapping and the Bushfire Attack Level (BAL) of your home to get a better understanding of your risk of flood and bushfires.

You can also ask your council whether your house has been built to natural disaster standards (e.g. cyclone standard).

Video: Preparing for the bushfire season

Video about preparing for bushfire season

Have you prepared for the bushfire season? This video from the Know Risk website explains how to keep your home and family safe during the summer months.

Transcript: Preparing for the bushfire season

Check if you are covered for disasters

If you live in an area prone to natural disasters, home and contents insurance is essential.

Your insurance policy will state what disasters you are covered for. While insurers generally cover storm damage, the level of cover varies. Some people have found out after a natural disaster that they were not covered for that event by their policy and have had to pay the repair costs themselves.

Flood cover

Flood cover is not included in all home and contents insurance policies, and where it is offered, it is defined as:

'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.

Check any exclusions for storms, cyclones, floods, bushfires and flash floods

If you have home and contents insurance, check whether you are covered for natural disasters such as storms, cyclones, floods, bushfires and flash floods. Make sure you understand the definition of each term, and any exclusions and conditions that apply, by asking your insurer questions.

If you are not happy with your current level of cover, talk to your insurer about what they can offer and get quotes from other insurers to find a policy that's better suited to your needs. Always ask potential insurers lots of questions.

Check if you have enough cover to rebuild

If you don't have the right amount of cover to rebuild your home after an event you are underinsured.

Consider a total replacement policy

If you choose a total replacement policy you are less likely to be under-insured. With this type of policy, the insurer agrees to repair or rebuild the home to the same size and standard as the current home. 

Consider a sum-insured extended policy

Some sum insured policies provide extended cover which is a safety net of around 30% on top of the amount you are insured for. If you suffer a total loss and the amount you are insured for is not enough then you will be paid this extra amount. Make sure you read the conditions that apply to this type of policy.

You should use at least three calculators to compare sum-insured policies because the results can differ.

Help for North Queensland residents

The Australian Government has a website to help North Queensland residents compare home insurance policies. The North Queensland home insurance website lists policy features and indicative premiums based on your suburb or postcode.

What to do after a disaster

In the event of a natural disaster, if you have the right cover, your insurer will help pay for repairs and other expenses, making it easier for you to get back on your feet.

If your home has been damaged in a bushfire, storm, flood or cyclone, here are some things you should do:

  • Contact your insurer - Lodge a claim with your insurer before you start any major repairs. Ask them to explain their claims process and talk to them about emergency or alternative accommodation. Don't worry if your insurance documents have been lost or damaged as insurance companies keep records electronically.
  • Take photos and make lists - Before cleaning up take photos and make a list of everything that has been damaged to assist your claim, including the serial numbers of electronics.
  • Start cleaning up - Consider removing damaged possessions like carpet and soft furnishings. 
  • Check with your insurer before authorising repairs - You may not be covered for unauthorised repairs or engaging tradesmen.
  • Be careful with damaged equipment - Do not use equipment or vehicles that may be damaged (e.g. an unroadworthy car).

For more information, the Understand Insurance website provides useful tips on preparing for natural disasters including checklists and emergency contacts.

If you're having problems with your insurance claim see how to complain.

Financial hardship after a disaster

If you are experiencing financial hardship after a natural disaster there are options available to you.

Help from your insurer

If you have trouble paying your excess, contact your insurer. They may agree for you to pay the excess in instalments or deduct it from any payout you receive.

If you are in urgent financial need, your insurer may be able to fast track your claim or give you an advance payment within 5 business days. Any advance payment will be deducted from the total claim.

Help from a financial counsellor

There are also free financial counselling services you can contact for help.

Australia is a great place to live but it is also a harsh environment. Taking some time to do your insurance homework will help ensure maximum protection for your home.


Related links


Last updated: 14 Jan 2016