Flood insurance – the excellent and the woeful – how does your policy rank?

Insurance is only good if you never have to claim. Right? Regrettably, this statement will soon prove true for many Queenslanders – because their policy simply does not extend to flood cover.

A Carter Capner Law comparison of the policies of all major providers shows that – when it comes to payment – many leading names will leave their customers, high and dry: RACQ, QBE, Allianz, NRMA and AAMI don’t include river flooding cover as part of the usual risk.

Our highest ranked insurer – Summit Prestige (1) – provides cover direct from Lloyd’s of London via an Australian underwriting agency, SRS. Summit policies include unlimited cover for all types of flood, including for swimming pools, jetties, fencing and other outdoor improvements.

Suncorp (3), while covering a home & contents for flood, excludes pools and some other external improvements. APIA (4) also provides river flood cover except for retaining walls. Australian Unity (2) provides flood cover that extends to pools.

Then there is a large gap between those top 4 and other insurers, in terms of the cover that their policies provide.

QBE (5) only covers “flash floods” and RACQ (6) does likewise to a limited extent. AAMI (7), Allianz (9) and NRMA (8) cover ‘run-off’ and these policies will be the subject of considerable conjecture and probably litigation, especially for affected homeowners in Brisbane and Ipswich while it is likely ‘flash flood’ and ‘run off’ cover will extend to homes in Toowoomba and the Lockyer Valley.

More than 28,000 Brisbane-Ipswich properties were inundated by the January 12-13  flood.  Another 5000 in regional centres and towns. By yesterday, the Insurance Council reported 12,000 claims worth $410 million had been received. With many properties likely to be the subject of at least two claims (owners for property and tenants for contents) one would expect the number of claims to at least quadruple. The average value of claims is also likely to at least double as owners of the most seriously damaged homes begin to tabulate their bottom lines.

How much litigation will there be? That’s anyone’s guess.

Here is the result of our analysis so far. Please email or comment with any observations or if you have a policy from an insurer that we have not listed.

SUMMIT PRESTIGE Home Insurance

Does policy cover flooding?

Yes. This policy covers all events unless specifically included. There are no exclusions for flood, actions of the sea, storm or sea surge, tsunami or tidal wave. They are therefore all covered.

Does cover extend to fencing, pools, outdoor improvements?

Policy defines ‘building’ to include all of these. They are all covered provided that the insured maintains the property in a satisfactory state of repair at all times.

Other notables

There is no cap on claimable amount for flooding – up to the maximum insured sum.

AUSTRALIAN UNITY Home and Contents Insurance (Everyday Care)

Does policy cover flooding?

Yes. Policy covers river flood and storm/rainwater damage.

Does cover extend to fencing, pools, outdoor improvements?

Policy does not extend to retaining walls; or wooden gates and fences over 15 years old. The policy does cover other permanent structural improvements which would include swimming pools.

Other notables

Policy does not cover damage by actions of the sea including high water, storm surge or tsunami. A $250 standard excess applies PLUS $500 excess when claiming for damage caused by flood. The PDS does not reveal a maximum benefit payable for flood claims.

* AUSTRALIAN UNITY Home and Contents Insurance Extra Care and Elite Care do not offer additional flood and storm damage cover.

SUNCORP Home and Contents Insurance (Classic)

Does policy cover flooding?

Yes. Policy covers loss and damage cause by storm and flood, inc. damage caused by rain, wind, hail and flooding from rivers, streets and canals.

Does cover extend to fencing, pools, outdoor improvements?

Policy does not cover swimming pools, retaining (or free standing) walls or garden borders and only covers gates and fences if they were not previously in an obvious state of disrepair.

Cover limit

No specific limit for flood: Subject to above, claims will be paid for all damage.

Other notables

Policy does not cover damage by actions or movements of the sea, but does cover damage caused by a tsunami or storm surge – if the storm surge is concurrent with storm or flood damage.

* SUNCORP Home and Contents Insurance (Platinum) offers the same level of flood and storm damage cover, but with additional features such as payment of temporary accommodation costs.

APIA Home Insurance

Does policy cover flooding?

Yes. Flood is defined as ‘the inundation of normally dry land by water overflowing from the natural confines of any natural or artificial watercourse or lake. Flood does not mean storm water run off from areas surrounding the site or water escaping from any water main, pipe, street gutter, guttering or surface.’ Limited cover is provided for storm, hail or rainwater damage.

Does cover extend to fencing, pools, outdoor improvements?

Yes. Damage to retaining walls not covered but pools and most other improvements are covered.

Other notables

Policy does not cover any action of the sea or tsunami. The PDS and Policy Wording does not specify a prescribed ‘maximum benefit’ payable for a flood. Other events are listed, but flood is conspicuously absent from the available information.

* APIA Home Insurance Extra offers no additional flood cover.

QBE Direct Home Cover Policy

Does policy cover flooding?

Flash flooding is covered. River flooding is not. Flash flood is defined as ‘what occurs when there are heavy, intense bursts of rainfall, usually during thunderstorms where so much water falls in a very short time that it cannot get away quickly enough and connects and flows into your home, but does not include when rainwater on the site cannot run off into a water catchment system, because it is overflowing in flood; and mixes with the flood water coming from the water catchment system and then flows into your home.’ Limited cover for storm and rainwater damage is also provided.

Does cover extend to fencing, pools, outdoor improvements?

River flooding not covered at all. For flash flooding, storm or rainwater, cover does not extend to gates, fences, retaining walls or swimming pools. Additional cover may be purchased for damage to gates and fences only.

Cover limit

No specific limit for flash flooding or storm (river flood not covered by policy).

Other notables

Policy does not cover any action of the sea, apart from a tsunami. High seas or a wave arising from any other event is not covered.

RACQ Household Insurance Policy

Does policy cover flooding?

No. This policy does not include flood cover as standard. Flood is defined as ‘rising water which enters your home as a result of it running off or overflowing from any origin or cause.’ Limited cover is provided for flash flood and stormwater run-off, defined as ‘a sudden flood caused by heavy rain that fell no more than 24 hours prior to the flash flood or stormwater run-off.’

Does cover extend to fencing, pools, outdoor improvements?

Flooding not covered. For flash flooding and stormwater run-off, cover does not extend to retaining walls or swimming pools. Storm cover does not extend to damage to swimming pools, retaining (or free standing) walls. Fences are not covered at all.

Cover limit

For flash flood and stormwater run-off: up to 50% of your insured home and contents sum, or $25,000 for each, whichever is higher. Maximum of $50,000. If the extra flood and storm surge cover has been purchased, will pay up to the sum insured for home and contents.

Other notables

Flood and storm surge protection may be covered by purchasing the option and paying more. Standard policy does not include these or other actions of the sea (excluding tsunami).

AAMI Home Building & Contents Insurance

Does policy cover flooding?

No. However ‘flood’ does not include stormwater runoff from areas surrounding the site, or water escaping from any water main, drain, pipe, street gutter, guttering or surface. Rather, flood is defined as ‘the inundation or covering of normally dry land by water which escapes or overflows from, or cannot enter, because it is full or has overflowed, or is prevented from entering because other water has already escaped or been released from it, the normal confines of any watercourse or lake, including any that may have been modified by human intervention, or reservoir, canal, dam or stormwater channel.’

Does cover extend to fencing, pools, outdoor improvements?

Flooding not covered. There is no exclusion of fencing, pools or other outdoor improvements in terms of damage suffered due to storms/rain water.

Cover limit

No limit specified for the limited flood cover available.

Other notables

Policy does not cover storm surge, tidal wave, tsunami, high tide or other action of the sea.

NRMA Home and Contents Insurance

Does policy cover flooding?

No. However policy does provide limited cover for storms, and the definition of storms includes ‘a sudden, excessive run-off of water as a direct erupt of a storm in your local area’. All other actions of the sea (storm surge, tidal wave) are expressly excluded.

Does cover extend to fencing, pools, outdoor improvements?

Flood damage not covered at all. Storm cover does not extend to damage to swimming pools; retaining walls; or fences that weren’t in good order and repair.

Cover limit

No specific limit for storm run-off (flood not covered by policy)

Other notables

Policy does not cover any action of the sea – high water, tidal wave or tsunami.

ALLIANZ SureCover Home Insurance

Does policy cover flooding?

No. The policy also excludes flood water combined with run-off and/or rainwater. Limited cover is provided for storm, rainwater and run-off damage. Run-off is defined as ‘rainwater that has collected on or has flowed across normally dry ground or has overflowed from swimming pools or spas’.

Does cover extend to fencing, pools, outdoor improvements?

Flood damage not covered at all. Storm/rainwater/run-off cover does extend to walls, gates, fences swimming pools and other fixtures.

Cover limit

For storm/run-off damage (no flood cover), will pay up to $1,000 for open-air contents. No other limits specified.

Other notables

Policy does not cover any action of the sea – high water, tidal wave or tsunami.

QTCU MemberCare Home Insure

Does policy cover flooding?

No. Floods are expressly excluded. Policy does provide limited cover for storms and rainwater damage.

Does cover extend to fencing, pools, outdoor improvements?

Flood damage not covered at all. Storm cover does not extend to damage to swimming pools or retaining walls. Fences and all other structural improvements are covered.

Other notables

Policy does not cover any action of the sea – high tide, high water, tidal wave, tsunami or storm surge.

* QTCU MemberCare Home Insure Plus offers no additional flood/storm cover.