Understanding Flood Insurance in Strata: Coverage and Considerations

Understanding Flood Coverage

Flood insurance is designed to cover sudden and accidental damage caused by floods. However, it's essential to note that some insurance policies may exclude flood events from their coverage. In the context of insurance, Generally, the definition of flood is the covering of normally dry land with water released or that has escaped from the normal confines of any watercourse, river, lake, creek, reservoir, canal or dam (please refer to the definition in the policy wording for the insurers definition that will apply to your policy).

Common Misconceptions about Floods

Misunderstandings about floods often lead to confusion regarding coverage. It's important to note that other forms of water damage, such as burst pipes or leaking roofs, do not fall under the definition of a flood. Floods typically involve water coming from bodies of water like lakes, rivers, or dams rather than water that originates from the sky and inundates an area (flash flooding). Understanding the specific characteristics of a flood is crucial when assessing insurance coverage.

Determining the Need for Flood Insurance

Assessing your property's exposure to flood risk is crucial in determining the need for flood insurance. While insurance brokers do not provide advice on flood exposure, some local councils in different cities across Australia offer flood awareness mapping, which serves as a valuable starting point for property owners. These maps provide insights into potential flood-prone areas.

If flood awareness mapping is unavailable, alternative methods include satellite searches on platforms like Google to check the proximity of your property to bodies of water. However, it's important to note that floodwaters can originate from distant bodies of water many kilometres away, making this method less reliable. For accurate and site-specific information, consulting a hydrologist to conduct a thorough assessment and provide a Site-Specific Report should be considered.

Considering Flood Insurance Options

Flood insurance can sometimes be an optional coverage offered by insurers. If you are uncertain about your property's flood exposure, obtaining quotes from insurers for both policies with and without flood coverage can help you make an informed decision. Assessing the premiums and conducting thorough research regarding your property's flood exposure are essential steps in determining the necessity of flood insurance.

Understanding flood insurance and its coverage is crucial for Strata buildings to mitigate potential damages caused by floods. Property owners can make informed decisions regarding the need for flood insurance by differentiating between common misconceptions and the actual definition of floods. Strata Insurance Solutions, a trusted provider of Strata Insurance, encourages property owners to stay informed about flood-related risks and explore suitable insurance options. Follow Strata Insurance Solutions on YouTube and LinkedIn for more insightful videos on strata insurance. By staying updated and informed, you can protect your strata building effectively.