Natural Disasters and Home Insurance: Are You Covered?
Floods, bushfires, storms — what's in standard policies and where the gaps are.
Australia's natural disaster landscape — cyclones, floods, bushfires, hailstorms, earthquakes — is severe. But the coverage in standard home insurance policies varies significantly between events and insurers.
What is usually covered
- •Storm damage: Generally covered by most policies — wind, rain, hail
- •Lightning strike: Covered in most standard policies
- •Bushfire: Covered in most standard policies (some have specific waiting periods when fire danger is elevated)
- •Earthquake: Covered in most standard policies
- •Tsunami: Covered in some policies as a defined event
Flood — the complicated one
Flood cover is the most complex area of home insurance. Post-2022 floods, many Australians discovered their policies covered 'storm damage' but not 'flood' — even though the same water caused both.
Standard definitions: 'storm damage' = water from above (rain, hail). 'Flood' = water rising from below (rivers, groundwater). Some policies cover both; some only cover one.
Since 2012, ASIC requires a standardised definition of 'flood' in home insurance PDS documents. But whether your policy includes it as a covered event varies.
Action item
If you're in a flood-prone area, specifically search your PDS for 'flood' and confirm it's a covered event — not just an undefined term. Consider dedicated flood cover if your standard policy excludes it.
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