Flood insurance: How to prepare for the worst

Over the past three years, Australia has been embattled with the effects of climate change. Droughts, bushfires, and flooding in rapid succession have each endangered millions of lives and cost us billions of dollars, not to mention driven up insurance premiums.

With more natural disasters looming on the horizon, we asked Allianz Australia to shed some light on how Australians can best prepare for storms and give their home insurance claims the best chance of success.

(Note: Interview has been edited for clarity and ease of reading).

While we can’t prevent extreme weather, there are a few things Australians can do to protect their families and homes from flood and storm damage. The top three game changers?

• Emergency preparedness

• Flood resilient housing design

• Adequate insurance cover

Having all this decided well before disaster strikes makes the greatest difference to recovery.

Allianz's National Manager, Claims Technical and Business Operations, Mark O’Connor recommends Australians “draw up a Home Emergency Plan that includes where you and your family will go if you have to evacuate your home and how you will contact each other if separated.”

As part of this prep, O’Connor recommends assembling an Emergency Pack complete with:

• A first aid kit

• Food and water supplies

• Blankets

• Warm clothing

• Matches

• Spare batteries

• Portable charger.

This way, you have all the necessary supplies on hand when the worst happens.

Where you live and what kind of property you live in matters big time when it comes to natural disasters, including flooding.

“For those properties near waterways or at the bottom of a hill, your entire house may be exposed to rising water or flash flooding,” says O’Connor. “​​Every Australian should educate themselves about their area and evaluate their risk.”

Other factors such as drainage, vegetation, architecture, rainfall, and history of flooding can all give you an idea of your home’s vulnerability. 

To find out if you live in a flood prone area, or accurately gauge a property’s flood risk, consult your local council or state emergency service.

Different homes and places in Australia will experience different kinds of damage. Location is the main factor to consider, as flood-prone areas will always be especially vulnerable to extreme weather events. 

Some locations, such as coastal Queensland, compensate for this added risk with flood resilient building design (such as elevating homes on stilts). However, most average Australian homes will still have weaknesses to consider.

“Damage to roofs and leaking is a common vulnerability,” explains O’Connor. “Precautions you can take ahead of storms include ensuring gutters and downpipes on your home and other structures are clear so that heavy rain can flow freely off your roof.”

Allianz also encourages removing overhanging branches and securing items that may become dangerous if blown about in high winds.

The NSW SES compiled a list of recommendations of how to reduce the vulnerability of buildings to flood damage – what they call “flood resilience”. This design principle can do a lot of heavy-lifting for your home’s defence against flood damage.

O’Connor suggests that homeowners considering flood resilience should start with a few key practical improvements:

• Dry flood-proofing, which makes homes watertight enough to withstand a large volume of water.

• Landscaping, which involves strategically planting trees and shrubs to mitigate erosion, slow down fast-flowing water, and divert water away from your home.

• Roof drainage, which directs overflowing stormwater away from your home or to strategic areas in the event of heavy rainfall.

However, for those looking to build a new house altogether, O’Connor invokes the realtor’s mantra: location, location, location. If you build in a spot with a high risk of flooding anyway, it might not matter what other preventative measures you take.

Insurance providers like Allianz, BudgetDirect, Huddle, Youi, and Virgin Money consider a number of factors when calculating home and contents insurance premiums.

Chiefly, O’Connor claims they look at a person’s risk profile and other factors such as, where you live, the amount and type of cover you require, relevant claim history, and compulsory government charges such as stamp duty and GST.

However, there may be some risks that will make flood insurance costly no matter what you do, or how well you design your home. 

“Among other factors,” says O’Connor, insurance providers will assess, “the frequency and severity of weather events, particularly drawing on past claims experience.” 

This means that while a single extreme weather event likely won’t impact your premium, rampant and repeated flooding in your area (as caused by climate change) will exert “upward pressure” on your premium over time.

However, it is still important to take every precaution you can to protect your home, and most insurance providers will offer flexibility to make their policies as affordable as possible.

“The fairest way to ensure Australians are not priced out of insurance is to ensure products provide customers options around their level of cover,” O’Connor explains. “Offering homeowners a choice of coverage means they are still able to secure insurance cover, at an affordable price, for the many other natural and other perils they face, such as fire, theft, hail and storm.”

Compare home insurance policies with flood coverage below, or read our guide on renter's flood insurance.