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The recent flooding in parts of southeast Queensland and northern New South Wales brings flood cover top of mind for buyers and homeowners who are rethinking their home insurance policy.

If you are planning to buy a home or are revisiting your current home and contents insurance policy, it is worth checking what your current home insurance policy provides.

In this article:

What flood insurance covers

Flood insurance is a type of home and contents insurance aimed to provide security and protect your home from issues resulting from an incidence of flood.

According to the Insurance Council of Australia, 93% of home building and contents insurance policies contain flood cover as a standard inclusion as of March 2015.

This type of insurance usually covers the costs of repairing the structure and interior of the property. In some cases, it also covers the cost of temporary accommodation of affected owners if they are displaced from their homes due to the flood.

Typically, flood cover does not include external damages to the property — for instance, any damage a flood caused on your driveway, fences, landscapes, might not be eligible for coverage unless you negotiate these to be part of the deal with your insurer.

Furthermore, damage that was caused by heavy rains and storms that preceded a flood might not be included in the areas covered by flood insurance. These are instead generally covered under the standard home insurance policy.

It is also crucial to note that some insurers do not include damages caused by floods resulting from storm surges, leaks from underground water, and other “escape of liquid” and water-related events.

To ensure which circumstances are covered by your policy, keep and check the product disclosure statement and raise any issues with your insurers.

Most flood-prone markets

According to Insurance Australia Group's (IAG) Flooding in Australia 2020 Fact Sheet, over one million properties — or about one in 10 homes — have some level of flood risk in Australia.

Some of the most at-risk areas in Australia include Queensland’s Brisbane and Townsville, and New South Wales' Central Coast and Clarence Valley.

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Source: IAG

Costs of repair for damages resulting in floods

The cost of repairing damages caused by floods depends on severity but IAG estimates that around $80,000 was the average claims cost to repair affected homes.

IAG Data from the 2019 Townsville floods showed that many flood-related home claims surpassed $100,000, hitting as high as $800,000.

Estimates from NRMA insurance used the depth of flood to show an indicative cost of damage:

Flood depth

Potential costs of damage to property


$20,000 to $60,000


$50,000 to $130,000


$100,000 to $220,000


$200,000 to $360,000

Source: NRMA

According to the Insurance Council of Australia, flood insurance premiums are often proportional to the flood risk of a property. This means that homeowners in flood-prone areas are likely to pay high premiums compared to those in areas with lower risk.