Storm, flood and fire insurance

It’s devastating when a natural disaster destroys or damages your home. Finding out you don’t have enough insurance can add to your distress.

Understanding what events and damage are covered by insurance can help you get the right cover for your home.

Knowing if you live in a disaster-prone area can give you a better understanding of your risk. This helps you choose coverage for the events that are most likely to happen to your home.

Storm flood and fire insurance

Find out if you live in a disaster-prone area

To find out if your home is in a natural disaster prone area, contact:

Ask them about flood mapping, historical flood records, and the Bushfire Attack Level (BAL) of your home. If you contact your council, ask them whether your house meets natural disaster standards.

Smart tip

If you live in North Queensland, visit the Australian Government’s North Queensland home insurance website. This site helps you compare home insurance policies based on where you live.

Understand storm and flood cover

Storms

Most home insurance and contents insurance covers storms. This includes damage caused by lightening, cyclones, strong winds, rainwater, hail and snow.

Rainwater is usually defined as water that falls from the sky. Cover usually includes damage caused by:

  • rainwater run-off — excess rainwater that collects and flows in normally dry areas

  • rainwater that overflows from stormwater drains

Floods

For some policies, cover for damage caused by floods is optional. For example, floods caused by overflowing streams, rivers, creeks and dams due to rainfall or a rise in the water level.

Even if you do pay for flood cover, most policies have exclusions, including:

  • Actions of the sea, such as storm surges, high tides and king tides.

  • Flood water combined with run-off or rainwater.

  • Flood not caused by rainfall, for example a landslide caused by a storm.

  • Flood as a result of a blocked or broken stormwater drain, water pipe or gutter.

  • Damage to gates, fences, retaining walls and driveways.

  • Rainwater entering your home due to a structural defect, faulty design or poor maintenance.

  • Wind, rainwater, hail or snow entering your home through an open window or door.

If you’re not sure what cover you have, ask your insurer or read your policy’s product disclosure statement (PDS).

Understand fire cover

Most home and contents insurance covers you for damage caused by fire, including bushfire.

Generally, a flame has to cause the damage. This means you’re not covered for heat-related damage, like scorching and melting, or smoke, ash and soot damage. For example, if your home is damaged by a nearby fire or bushfire.

Common exclusions from fire insurance include:

  • A bushfire that occurs less than 72 hours after you bought your policy.

  • Intentional fires.

  • Accidental fires caused by negligence or recklessness.

  • If your house doesn’t comply with fire regulations, for example a heater isn’t installed properly.

CHOICE provides more information on the definition of fire and how to check it in your policy’s PDS.

Check if you have enough insurance to rebuild and repair

If you live in a disaster-prone area, it’s worth considering ‘total replacement cover’ with your home insurance. This covers whatever it costs to repair or rebuild your house to the same standard. It’s generally more expensive, but means you’re less likely to be underinsured.

However, most insurers only offer ‘sum-insured cover’. This is an estimate of how much it would cost to repair or rebuild your house.

To avoid being underinsured with sum-insured cover, check if your insurer offers a ‘safety net’ or ‘safeguard’. This means they add up to 30% to your sum-insured amount in the event of a total loss.

For more information, see cover the cost of rebuilding your house.

Also check your policy or ask your insurer about claim limits (or caps). These are maximum amounts for repairing damaged items and the total amount you can claim.

What to do after a natural disaster

For steps and help to manage the recovery process, see what to do after a natural disaster.

Source:
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/home-insurance/storm-flood-and-fire-insurance

Important note: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns.

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CFP® Dip FP
Authorised Representative 298494
Interprac Financial Planning Pty Ltd 

Darryl Jopling

Senior Adviser

I have worked in the financial services industry since 1982 and as a Financial Adviser since 1999.

I have worked for large Financial Planning businesses, Membership based organisations and looked after the financial planning needs of clients within an Accounting Practice before starting my own business.

I am married, have 4 older children and a grandson and I am keen golfer with mixed results like many .

I have been through many of the strategies I talk with clients about myself and with my family.

I have been through the journey of seeing my parents move into Aged care and negotiated the difficulties and pitfalls of understanding the system for them and this gives me an excellent insight into what is required to assist families at this difficult time.

In a previous roll I used to run retirement seminars looking at Centrelink and Retirement Incomes and how to make these work for you. I have helped many of my clients with Aged Care advice when their parents needed to move into Nursing Homes. For many clients I assist them with superannuation, building wealth and protecting their loved ones with insurance.

I am supported by his, Licensee, Interprac Financial Planning’s in-house resources and ongoing technical, systems and training.

I am committed to understanding your needs and identifying strategies and products to help you achieve your goals.

My guiding principle as an Adviser is to design plans which help to provide my clients with clarity of purpose and the opportunity to build a solid financial foundation.
I will take the time to listen, explain things clearly and keep you informed throughout the advice process.

My experience is complemented by professional qualifications including:

  • Certified Financial PlannerTM Professional
  • Diploma of Financial Planning

At Choice Financial Advice we work with you along the way on life’s journey.

Whether you are getting married, starting a family, embarking on the trip of a lifetime, planning to enjoy your years after work or assisting elderly parents with Aged Care and Nursing Home placements, we can help.