Flood Insurance

Protect your home against flooding by comparing your insurance options here with Savvy.

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, updated on September 13th, 2023       

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If you’re living in an area readily affected by flooding, or simply want to protect against the worst-case scenario, you should look at insuring yourself. Receiving cover for flood damage can save you thousands of dollars compared to not insuring yourself against this kind of water damage. Read on to find out more about flood insurance, how it works and why it might be the right option for you.

What is flood insurance and how does it work?

Flood insurance usually comes in the form of a built-in home, contents or home and contents insurance feature or as an optional extra available to be added to your policy. As you may expect, flood insurance provides coverage for damage caused to your property and/or belongings by flooding. Insurers will have a clear definition of flooding to determine what is and is not covered under their policy. In most cases, this definition will cover water escaping from its usual environment stemming from the sources listed in the table below.

In addition to this, most flood insurance policies will cover you for damage sustained as a result of rainwater runoff and flash flooding due to torrential rain, while you may also be covered for flooding that occurs as a result of a storm surge. Parts of your property and belongings that can be insured against flood damage are listed in the table below.

Covered sources of flooding What you can insure for flood damage
The foundations of your property
Permanent fixtures like plumbing and electrical
Built-in and necessary kitchen appliances
Air conditioning or heating sources
Any other naturally occurring watercourse, regardless of any modifications made to it
Other electrical possessions like televisions or gaming consoles

In terms of what you’re not covered for, this will vary quite significantly between insurers. Flooding caused by ocean activity, such as rising sea levels or larger waves, won’t be covered. If you have a basement or space beneath your property, it and the items stored within also may not be wholly covered under your flood insurance should it sustain damage. Additionally, any paperwork holding value, which is most at risk of being destroyed due to water damage, almost certainly will not be covered.

How are my flood insurance premiums calculated?

The most important factor that contributes to any addition to your existing insurance premium is flood risk. The primary resource used by insurers to determine a given property’s risk of flood exposure is through the National Flood Information Database (NFID). This database is responsible for providing information to insurers across Australia relating to the risk posed by flooding to over 10 million properties countrywide.

Flood insurance in Queensland is a perfect example of how much weather can influence insurance premiums. North Queensland, which is prone to extreme weather events like cyclones and storms, holds by far the highest home and contents insurance rates in Australia at more than double the average cost across the rest of the country. This can be almost entirely attributed to the weather, where the cost of cyclone and flood coverage distorts the price significantly.

While the NFID isn’t for public access, it’s not too difficult to determine how your flood risk can affect your premiums. If you live in relative proximity to a body of water (particularly downhill from one), are in a coastal area or live in a city or town with a history of flooding or other extreme weather events that could cause it, your insurance premiums are almost guaranteed to be higher. Additionally, if you’ve made flood insurance claims in the past, your premiums will increase. In terms of your property’s characteristics, the materials it was made with and the height of your floors will be taken into consideration, as will its slope.

It’s always wise to get a quote from Savvy when researching your different flood insurance options. Our advanced comparison tools contrast the best options on the market in the most important areas and can help you determine which plan suits your situation.

Should I take out a flood insurance policy to protect my home?

Maybe – depending on how much you’re at risk of suffering from flood damage. If you live in an area with no history of flooding and aren’t situated near any bodies of water, the chances are that your home and valuables aren’t at much risk of damage at all. This doesn’t necessarily mean that you shouldn’t look for flood coverage on your home and contents insurance policy, though. For those in this position who don’t feel that they’re at any risk of sustaining flood damage, it’s likely that you’ll be paying very little extra, or none at all, for added flood coverage. In this sense, it might not hurt to keep it tucked away for a rainy day.

If you’re living in an area that’s at greater risk of flooding, you should ensure that you’re covered for flood damage under your insurance policy. Even though it’ll increase your premiums, in some cases by a substantial amount, it’s always worth protecting your finances from being depleted due to funding repairs and replacements across the board due to water damage. No matter the cost, you should buy flood coverage if you’re at risk; the consequences could be dire if you don’t.

The pros and cons of flood insurance


Covers you for flood damage

Exactly what it says on the tin, flood insurance covers you for a variety of damage that your house and/or belongings may sustain

Inexpensive for lower-risk customers

If you want to add flood cover to your home and contents insurance policy, it may only cost a small amount depending on your risk (or be built into your policy as is)

Peace of mind

For homeowners living in a higher-risk area, covering for flood damage can ease concerns about being left with a hefty bill for extensive damage


Doesn’t cover for all types of flood damage

Any flooding caused by action of the sea, such as an increase in sea level, increased wave action or a storm surge is unlikely to be covered by the flood component of your insurance policy

May not be necessary

If it’s determined that your property is at very minimal or non-existent risk of sustaining flood damage, it might not be worth taking out flood cover if there’s an extra cost associated

Common flood insurance queries

What’s the difference between a flood and a flash flood and how might it affect my insurance claim?

Flooding is usually defined by an overflow of water from the banks of its given body of water, and can happen gradually over days, weeks or potentially even months. Flash flooding, on the other hand, is caused when torrential rain is unable to be handled by soil absorption or drainage. It’ll usually take only six hours or less to begin flooding from the start of the rainstorm.

Is in-built flood insurance compulsory or can I avoid it?

You can cancel your in-built flood cover under certain circumstances – those at risk of flooding who are likely to pay a more substantive premium to cover themselves can choose to not be covered for flood damage. However, those with little or no risk who wouldn’t be paying much for their cover anyway may not have the option to remove that coverage. In this situation, it’s easier to simply accept the flood cover if it won’t affect your premium cost anyway.

Would a tsunami be covered under my flood insurance policy?

No – but although it’s technically an action of the sea, tsunamis are caused by underground earthquakes. Because of this, you could be covered for tsunami damage if your home and contents insurance policy contains coverage for earthquake damage.

Can I receive flood insurance coverage for my strata-titled property?

Yes – some strata insurance policies will offer flood cover as an optional extra for this type of property. Flood coverage can be requested by the owners corporation on behalf of all the strata property owners which, if granted, will likely come in the form of an added premium.

How do I find the best flood insurance in Australia?

The best areas to compare flood coverage in different insurance policies are in the additional cost and what they cover. The easiest of the two is the former, as you can quickly determine whether it’ll cost you more as an optional extra or is built into your policy already. It’s important to be aware of the coverage they offer, too, as cheap flood insurance won’t do much good if you’re not covered where you want it. Some will be more thorough than others, so you should keep your eye out to make sure that it covers you in the areas you need.

Can I add flood coverage to my home and contents insurance policy if I’m about to be affected by flooding?

You can – but you may find it’ll be too late to cover you. Many insurers will only activate a new flood optional extra 72 hours after you’ve bought it to combat customers looking for last minute cover before flooding hits their property. If you already have an insurance policy that covers flood damage that’s about to be renewed, it’ll be immediately activated by the time the next policy rolls around.