September 23, 2018

Flood Cover in Home Insurance Policies

A major flood can bring significant damage to life and property, so if you and your family are living in a flood-prone area, you may want to prioritise including flood cover in your home insurance. Simply put, a flood cover is coverage for your property and possessions when these get damaged by floods.

There are generally two features of flood cover: total replacement and sum-insured extended policy.

What can be considered “flood”? It refers to a large amount of water that overflows to dry land. For instance, flood is water that has escaped or been released from the normal limits of bodies of water, canals, and reservoirs.

Insurers offer different types of flood cover, in terms of the extent and nature of coverage. With so many options available, how can you get the best home insurance for your family?

To ensure that you can get the best option, make sure to compare home insurance of several insurers. Any major purchase or investment entails putting two or more options side by side to compare features and other offerings. The same holds true for flood cover in home insurance policies. With your needs and current financial situation in mind, compare home insurance policies and choose the one that has the best offer. You can use an online home insurance comparison tool to help you narrow down your selection.

So what do you look for when looking for the best home insurance?

Determine if your home insurance included flood cover

Insurers vary in how they treat flood cover in their policies. Some treat it as mandatory while others make it a default inclusion, but you can remove it. Some even add a limit to the cost of damages.

Know the flood risk to your property

In general, if your area is prone to floods, the insurance premium will be much higher. The level of flood risk gets higher if your property is near waterways, rivers, and agricultural developments. You can also ask your local council for details about flood risk levels.

Understand what is exactly covered

There are generally two features of flood cover: total replacement and sum-insured extended policy. With a total replacement policy, the insurer will take care of the repairs and rebuilding of your home. On the other hand, a sum-insured policy comes with a safety net. This means that in case your home gets totally damaged by a flood and the insured amount is insufficient, the insurer will pay you an additional amount.

If you’re in a flood-prone area, make sure that flood cover is included in your home insurance and that you understand what you are covered for.

Know other tips on how to compare home insurance in Australia? You can share your ideas in the comments section.

About the author  ⁄ Marxa Dillan

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