Does home insurance cover you for storm damage or erosion?

Parts of the NSW Central Coast have taken a battering in recent weeks, with large waves and powerful surf causing severe damage to several beachfront homes.

With some homes partially collapsed and others left with supporting beams exposed, homeowners are looking to their home insurance to see how well they're covered in the case of coastal erosion.

Unfortunately, some insurance customers may be in for a nasty surprise.

When it comes to storm surges, tsunamis and erosion, there are some big differences between insurers. Many providers won't foot the bill for damage caused by sea storms or erosion, while others have significant terms and conditions.

Although it's still possible to receive some protection, complex insurance policies can make it difficult to understand exactly when you're covered and what you're covered for - so it's always important to check with your provider.

Below are two common phrases listed in your home insurance policy that can help you understand whether you're covered for coastal erosion.

'Actions of the sea'

It's a vague term that can be confusing for homeowners. Generally, actions of the sea won't be covered by Australian home insurance policies and neither will damage caused by gradual sea level rise. However, there are some exceptions to the rule:

Tsunamis: Tsunamis might seem like an action of the sea but since they're caused by earthquakes, most insurers will cover them. Be aware though, that's not across the board so always check your PDS to be sure. Coles home insurance, for example, won't cover tsunamis.

Storm surges: A storm surge, or a high tide, is when the level of sea water rises dramatically - but only temporarily. It's not commonly covered, but you can find companies that do offer protection - including St George and Westpac.

Coastal erosion and earth movement

Erosion as a result of rising sea levels and climate change has been a cause of concern for many coastal residents for some time.

Unfortunately, gradual erosion is excluded by Australian home insurers. This means you generally wouldn't be covered for coastal erosion that has occurred over a lengthy period of time.

Yet there are some situations where you may still be covered. For instance, if the erosion was sudden and caused as a direct result of a tsunami or storm, you may be eligible to claim for damages. Again, this will vary between insurers so always check your PDS.

Still unsure if you're covered?

The best place to start is by reviewing your product disclosure statement (PDS). This will outline all the various scenarios your insurer will cover you for. If the terminology is confusing or you want further clarification, get in touch with your provider as soon as possible.

Remember, there are some major differences between insurance providers when it comes to things like erosion. It's important to understand what you're getting before signing up to a policy, to avoid being caught out.

Nicola Middlemiss is a senior insurance writer at Finder

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