Home insurance in flood and cyclone areas: your options

What it is and who needs it

Home building insurance pays to repair or rebuild a house after events such as storm, fire and, where included, flood. No law requires it, but lenders normally do. In flood-prone and cyclone-prone areas the same product is priced on the risk at each address. Some owners find cover costly, restricted or refused.

What is usually covered, and common exclusions

Moneysmart says most home policies cover storm damage, including cyclones, wind, hail and rainwater run-off. Flood is treated separately. Home policies use a standard legal definition of flood: water that has escaped from the normal confines of a lake, river, creek, other natural watercourse, reservoir, canal or dam.

Check these points in the product disclosure statement:

  • whether flood is included, optional or excluded
  • how storm surge and other damage caused by the sea are treated, because many policies exclude them
  • limits on fences, sheds, pools and landscaping
  • how long temporary accommodation is paid for
  • conditions about maintenance and existing damage.

How it is sold, and when a broker is the usual route

Most home insurance is bought directly from insurers. In high-risk areas fewer insurers quote. Other routes are:

  • the Australian Government's North Queensland home insurance website, which compares policies by location
  • the Insurance Council of Australia's Find an Insurer service
  • an insurance broker, who can approach insurers and underwriting agencies that do not sell direct, including Lloyd's underwriters.

A broker is the usual route after direct insurers have declined or quoted beyond reach. Check that the broker holds an Australian financial services licence, or is an authorised representative, on the ASIC professional registers.

What makes this cover hard or expensive to get

The Insurance Council of Australia states that owners with a high risk of flood pay a higher premium than others. Insurers also look at building age, construction, floor height and past claims.

The Australian Government's cyclone reinsurance pool began on 1 July 2022 and is backed by a $10 billion guarantee. It covers insurers for cyclone damage and cyclone-related flood damage, from the start of a declared cyclone until 48 hours after it ends. It does not cover floods unrelated to a cyclone.

If an insurer declines or cancels your cover

1. Answer the insurer's questions with care

For consumer insurance contracts, the law requires you to take reasonable care not to make a misrepresentation to the insurer. This duty has applied since 5 October 2021 and replaced the older duty of disclosure for these contracts. Answer every question honestly and completely, including questions about past claims, past flooding and earlier refusals. A careless or false answer can lead to a reduced claim or a cancelled policy.

2. Ask for the reasons in writing

Under the General Insurance Code of Practice, an insurer that cannot offer cover will give its reasons and tell you that you can ask for the information it relied on. It will also refer you to the Insurance Council of Australia or the National Insurance Brokers Association for other options, and explain its complaints process. Ask for all of this in writing. If a policy is cancelled, ask which policy term or legal ground the insurer relies on.

3. Use the insurer's internal complaints process

If you think the decision is wrong, lodge a written complaint with the insurer. Put the word complaint in the heading, set out what happened and what outcome you want, and attach documents such as a council flood certificate or evidence of repairs.

4. Go to AFCA

If the insurer does not resolve the complaint, generally within 30 calendar days, you can go to the Australian Financial Complaints Authority (AFCA). It is free. Call 1800 931 678.

5. Use a broker while this is under way

Do not leave the home uninsured during a dispute. A broker can look for replacement cover and explain options such as a higher excess or a policy without flood cover, with the gaps that leaves.

Questions to ask before buying

  • Is flood covered, and does the policy also cover storm surge?
  • What excess applies to flood, cyclone and other named events?
  • Is the sum insured enough to rebuild to current standards, including debris removal?
  • What flood data did the insurer use for my address, and can I supply a survey or floor height?
  • Would mitigation work, such as raising the home or adding cyclone shutters, change the premium?
  • What must I do about maintenance for a claim to be paid?
  • If the insurer will not renew, how much notice will I get?

Where to complain

Complain to the insurer first, then to AFCA if the answer is late or unsatisfactory. Complaints about a broker's service follow the same path: the broker first, then AFCA.

Find a licensed broker

Browse businesses licensed to arrange general insurance in your city, or search every state.

Sources

Last checked: 2026-10-06

Scroll to Top