Stormwater Or Floodwater? Only Your Insurance Policy Knows, It Seems!

flooding in NSWI know its spring but as investors we need to spec­u­late in to the future and look at worst case scen­ario. In the past tor­ren­tial storms and flash floods have had many investors in toongab­bie and seven hills scratch­ing their heads, try­ing to work out just what it is their insur­ance policy does cover in the situation.

Most insur­ance policies cover dam­age from storm­wa­ter (though to dif­fer­ent degrees) but do not cover dam­age from flood­wa­ter. Yet many homeown­ers would con­sider a sud­den rush of water which floods their house to be storm­wa­ter as it is a res­ult of the storm!

Fido, the con­sumer web­site of the Aus­tralian Secur­it­ies and Invest­ments Com­mis­sion (ASIC), offers the fol­low­ing defin­i­tion. Fido advises that you should check the details of your own insur­ance policy, but as a gen­eral guide:

  1. Storm­wa­ter” is defined as water run­ning over the sur­face of the land while “flood­wa­ter” is defined as water escap­ing from a water course.
  2. In prac­tice, it usu­ally requires expert evid­ence from hydro­lo­gists to help determ­ine whether the dam­age was caused by “storm­wa­ter” or “floodwater”.
  3. If the dam­age was caused by a com­bin­a­tion of “storm­wa­ter” and “flood­wa­ter”, this dam­age will not be covered (even if your policy doesn’t spell out what hap­pens in this situation).


The Insur­ance Coun­cil of Aus­tralia advises that the first step in determ­in­ing whether your home could be at risk is to obtain a flood map from your local Coun­cil or flood­plain man­age­ment authority.

Some flood maps focus primar­ily on rivers and creeks; how­ever many also cover his­tor­ical loc­al­ised flood­ing due to over­taxed drains, etc (flash flood­ing). Con­sumers should be aware that many factors can influ­ence the accur­acy of flood map­ping includ­ing build­ing devel­op­ment, road works, new agri­cul­tural growth, changes to river and creek catch­ments as well as changes to drain­age and sewer arrange­ments for your area.

Fre­quent re famil­i­ar­isa­tion of the risks through engage­ment with your local coun­cil and/or flood­plain man­age­ment author­ity is essential.

The Insur­ance Coun­cil warns that in some areas flood maps are either not avail­able or less than thor­ough.  This has led to a push for the devel­op­ment of a con­sist­ent national flood map­ping model, as the main prob­lem most insurers have in provid­ing res­id­en­tial flood cover is their abil­ity to map, under­stand and price the risk.

Aus­tralian Secur­it­ies and Invest­ments Com­mis­sion (ASIC) has offered some tips about get­ting the right insur­ance cover and mak­ing claims to meet the cost of repairs to homes and possessions.

We recom­mend Investors check their prop­erty insur­ance policies and refer to your insurer for cla­ri­fic­a­tion of your policy terms.


Jhai is an award win­ning Inter­net Mar­ket­ing Real Estate Agent for Eld­ers Toongab­bie and Kings Langley. After run­ning his own inter­net mar­ket­ing busi­ness he has now set his own sites for the real estate industry. He observed that 90% of real estate agents did not know how to mar­ket them­selves online. Jhai is now fixed on one goal. To teach real estate agents that they can mar­ket online so much bet­ter than they cur­rently are.

Since then he has been con­sist­ently quoted in the Sydney Morn­ing Her­ald and Real Estate Busi­ness online. He is a reg­u­lar guest blog­ger on, shar­ing his expert­ise of mar­ket­ing aspects for the Real Estate Industry. His biggest pas­sions are his wife, mar­tial arts, dogs and most of all property.

seven hills real estate agent NSW
Cnr Federal Road Prospect Highway Seven Hills NSW 2147 Australia