Reading the fine print on insurance is a task that no one enjoys. However, it is crucial to pay attention to the details of your insurance, especially when it comes to strata properties. If your body corporate property has been devastated by water damage, you’re looking at losses worth thousands of dollars, so it’s important you know the difference between storm damage and flood damage, and what you are covered for.
What is the difference between storm and flood damage?
Although most consumers may not realise this, insurance providers see a distinct difference between storm and flood damage. Ever since the Queensland floods of 2011 however, the Insurance Code of Practice has been updated to include a standard definition for flooding.
According to the code, a flood is defined as “the covering of normally dry land by water that has escaped or been released from the normal confines of any lake, river, creek or other natural watercourse, whether or not altered or modified, or any reservoir, canal, or dam”.
Storm damage, on the other hand, refers to the flooding of a property by rainwater, hail, cyclones, tornadoes, and other similar elements.
What happens if my property is damaged?
After contacting your insurer to lodge your claim, the insurer will usually send an assessor to the property. They will conduct a report on their findings which is used by the insurer when deciding whether to accept or reject the claim.
In instances where the assessor cannot figure out the cause of the damage, they will enlist the services of a hydrologist. This is a water specialist who will examine the property and surrounding areas to determine whether the cause of the damage originated from storm water or floodwater. Their report will generally include information such as:
- The amount of rainfall before the banks were broken
- Where along the creek/lake/river/dam the water broke
- The path the water took from where it broke its banks to your property
Why is my policy important?
Depending on your certificate of insurance and PDS, what you are covered for will vary. When it comes to damage caused by flood water, some insurers will exclude it completely, others will treat it as an optional extra, while others include it as a standard. For example, your insurance policy may be worded as follows:
Cover provided for:
- Rain or thunderstorm
- Violent winds
- Cyclone or tornado
- Hail or snow
- Sudden, excessive run-off of water as a direct result of a storm in your local area
Cover is not provided for:
- Loss or damage caused by a flood
You should also check your policy to see if it covers water damage that occurs as a result of burst pipes, water mains, gutters, tanks and other systems and appliances.
These days, the Australian Financial Complaints Authority tends to rule in favour of the consumer when it comes to properties affected by both storm and flood damage (particularly in instances where it is uncertain whether the flood damage occurred before or after the storm run-off. That said, we highly advise checking your particular insurance policy to make sure you are covered for all eventualities.