Weather forecasters were spot-on when they warned the flood-inducing La Nina climate pattern posed a key risk to parts of eastern Australia through the late summer and autumn.

The “little girl” – as La Nina literally means in Spanish – struck with ferocity when it arrived in March. Thousands were forced to evacuate as days of non-stop heavy rain inundated New South Wales and southeast Queensland.

As the recovery efforts continue – and they will take months to complete – one thing is becoming all too depressingly familiar: many of the affected businesses and households have no flood cover.

It has been nearly a decade since a standard definition of flood was adopted to assist insurers and consumers in the aftermath of the 2011 Brisbane floods. Yet confusion over the term and what it means for risk protection in the event of a flood continues to flummox the public at large, especially for those who reside in low-lying areas that are most prone to such disasters.

Automatic flood cover is now usually included in standard home insurance policies unless the customer chooses to opt out. For commercial policies flood cover is generally provided only if the insured opts for it.

Cost is usually the reason given by people who choose not to have flood cover. That’s all well and good if the day never comes when they need to make a claim. But the New South Wales/Queensland flood disaster has again demonstrated the risk of going without such protection.

The cost of reinstating a flood-damaged home or business will far exceed the cumulative cost of annual insurance premiums. And while the affordability of flood insurance is an issue, it should be recognised that the premium reflects the very high costs insurers face in returning a home or business to the state it was in before.

So what exactly is a flood cover and how does it protect you and your business?

The insurance industry defines flood as the “covering of normally dry land by water that has escaped or been released from the normal confines of any lake, or any river, creek or other natural watercourse, whether or not altered or modified; or any reservoir, canal, or dam”.

Even if a policy specifically excludes cover for flood damage, it will likely still cover for events such as storm damage or rainwater damage. So it’s vital that you understand fully what’s in the policy.

We hope that day never ever comes, but being prepared is the key to protecting your business and livelihood. Ignoring the flood threat isn’t the solution.

For an obligation free insurance review, contact us today: 1300 MY ADROIT mail@adroit.com.au adroit.com.au

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