No doubt you have been aware of the increased focus on climate change and the extreme weather changes that are occurring all around the world. It seems a day doesn’t go by without a very tragic disaster being reported, resulting in loss of property and in many cases loss of life.
Even in our own backyard, there have been recent instances of severe flooding causing huge damage to residential property. Unfortunately, then follows the sad stories of homeowners that thought they would be covered by their home insurance only to find that they weren’t covered for any damage caused by flooding.
This can be devastating, and many have lost their house, their belongings, and their spirit.
We strongly urge you all to check your insurance cover for your own home and as well as your investment properties.
The insurance industry has made a concerted effort in recent years to simplify the wording in their policy documentation and remove unnecessary jargon where possible. This is part of the move towards ‘plain English’ definitions of policy inclusions/exclusions and the amount covered.
However, there can still be much confusion regarding many terms.
Do you know the difference between: Storm Damage, Rain Water Damage and Flood Damage?
Most Insurers generally cover storm and rain water damage. However, the level of cover varies from insurer to insurer, with some insurers offering different levels of cover and exclusions.
This can result in some people finding that their claims will not be paid, and that they will have to meet the repair costs from their own pocket.
NOTE: Most house and contents insurance policies exclude cover for flood damage.
Floods occur when rivers; creeks; lakes; dams; reservoirs; and other natural watercourses (even if modified by humans) burst their banks or overflow. Low lying property near water is more likely to be prone to flooding, but even land on high ground can be flooded when creeks burst their banks in a downpour. Floods may be also be caused by storms and heavy rain.
Please do check with your insurance company if you are unsure whether your existing policy covers damage caused by the storm and/or flood. Ask them to clearly explain what the coverage is for flood damage. Check the exclusions to see if you are missing out on the protection you may need. For example, some flood insurance may cover water damage caused by the flood, but exclude damage caused by earth movement as a result of the flood.
Other insurers may only cover a percentage of the value of your property for flood damage.
Of course, there will be an increase in premium if you are adding flood cover to an existing policy, but you might be pleasantly surprised how low the cost is. As usual shop around and get any details in writing.
Be assured, as part of our due diligence, we do take the issue of possible flooding into account when we are sourcing new land developments. We always check with the local council to see what flood rating the area has been allocated and do our best to select the area with the lowest probability of being affected by flooding.
You may think, well my properties aren’t in a flood prone zone so it should be alright…..but…who knows??
In any case with all the instances of wild weather happening, anything is possible…..and as one of our senior politicians so eloquently put it …”Shit Happens”.