How to make an insurance claim if your home has been flooded

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If your property and its contents have been damaged in the widespread floods that have ravaged eastern Australia, contact your insurer as soon as you can to make a claim.

Don't worry if don't have or can't find your insurance papers, explains the Insurance Council of Australia. Insurance companies have electronic records and only need your name and address.

Around 80% of homes have some sort of home insurance, according to a report into insurance in Northern Australia by the ACCC carried out over three years from 2017-2019. The 20% of Australians in northern Australia with no home insurance, cite the high cost as the reason not taking it out.

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Of the homes with some home insurance, many are underinsured as insurance costs in northern Australia are at least double what people pay in the rest of Australia, according to the ACCC. If they live in high-risk regions, vulnerable to storms and floods, the insurance costs are even more expensive.

Premiums can vary wildly in high-risk areas from $1,000 to $10,000 for what looks like similar cover, explains Rade Musulin, convenor of the Actuaries Institute Climate Risk working group.

In the recent floods so far there have been 97,000 claims to insurers relating to property damage caused by flooding, but many more are expected as telecommunications are restored in Queensland and claims are made by residents hit by the floods across New South Wales.

How to make an insurance claim

1. Safety is the priority - don't do anything that puts anyone at risk.

2. Only return to your property when emergency services give the go-ahead.

3. If water has entered the property, don't turn on your electricity until it has been inspected by an electrician.

4. Contact your insurance company as soon as possible to lodge a claim and seek guidance on the claims process.

5. Don't worry if you can't find your insurance papers. Insurers have electronic records and need only your name and address.

6. Property owners who have sustained roof damage should advise their insurer, your insurer will arrange emergency works to minimise any hazards and prevent further damage. This can include isolating damaged solar panels or electrical circuits and installing a roof tarp.

7. You can start cleaning up but first take pictures or videos of damage to the property and possessions as evidence for your claim.

8. Keep samples of materials and fabrics to show your insurance assessor.

9. Remove water or mud-damaged goods from your property that might pose a health risk, such as saturated carpets and soft furnishings.

10. Make a list of each item damaged and include a detailed description, such as brand, model and serial number if possible.

11. Store damaged or destroyed items somewhere safe.

12. Speak to your insurer before you attempt or authorise any building work, including emergency repairs, and ask for the insurer's permission in writing. Unauthorised work may not be covered by your policy.

13. Do not throw away goods that could be salvaged or repaired.

14. Do not drive your vehicle if it has suffered water damage.

15. Do not drive in flood water.

Warnings have been issued yesterday by the Insurance Council of Australia about disaster chasers or people who door knock damaged homes, looking to exploit traumatised, vulnerable householders.

The ICA says to report people to government authorities such as the Australian Competition and Consumer Commission (ACCC) or the police if they are offering tree and debris removal, asking to be paid upfront in cash but leave without doing the work or not completing the work well. Disaster chasers can also offer to undertake home inspections or repairs for cash payment.

Typically disaster chasers don't have a building licence, trade qualifications, professional indemnity insurance or an ABN. They can be demanding and intimidating, sometimes falsely claiming that they have been sent by an insurer and asking the householder to sign a contract for inflated repair work on the spot, promising them that the insurer will pay for all work.

Check your policy

If you are worried about what your home and contents insurance covers, even if you aren't directly impacted by floods, it is time to go over the terms and revise the amount of cover.

If you have a mortgage, building or home insurance is crucial. Often it is mandated by your lender. It insures you against the damage or loss of the home and structures such as a garage.

Often home insurance comes with contents insurance that covers damage and theft of what is inside the home.

You may have to list and pay extra to cover more valuable contents such as artwork or jewellery.

Shop around for home insurance so you have the most appropriate cover. The cheapest insurance isn't necessarily the best.

You need to understand what you are paying for, particularly any specific conditions and exclusions or limits.

Flood, according to Musulin is particularly complicated. He says all extreme events pose significant challenges in risk assessment, but with flood, insurers look into not only the hydrology and weather, but climate risk, building codes, the state of the infrastructure like dams and levees plus the human decisions around water management.

Also see if you are covered for total replacement or sum insured cover for your home. One replaces your home that was damaged and the other gives you a set, lump sum amount.

You also need to realistically estimate building costs if your home needs to be rebuilt, particularly as building materials and labour costs have risen.

According to the ACCC there can be significant differences in the quotes for a single property by different insurers. The ACCC compared quotes from different insurers for the same house in Townsville and returned quotes ranging from $2150 to $4871.

The ACCC says costs range because insurers have different assessments of natural disaster risks as well as estimated working claims costs, reinsurance costs, commission costs and margins.

Even though consumers can save serious money by shopping around, they tend to stick to their insurer for combined home and contents insurance. The ACCC found 94% of people in north Queensland stayed with their insurer followed by 87% in the Northern Territory and 83% in north Western Australia in 2018-19.

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Susan has been a finance journalist for more than 30 years, beginning at the Australian Financial Review before moving to the Sydney Morning Herald. She edited a superannuation magazine, Superfunds, for the Association of Superannuation Funds of Australia, and writes regularly on superannuation and managed funds. She's also author of the best-selling book Women and Money.

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