Australian home insurance looks much like a British buildings and contents policy on the surface, but the risks it is priced around are very different: riverine flooding, severe storms and hail, tropical cyclones and bushfire. Those risks drive premiums, exclusions and even whether an insurer will offer a policy at all. This piece explains how flood, storm and bushfire cover usually work and what to check before you sign.
Flood is defined, and it is not the same as storm
In the UK, flood cover is normally part of a standard buildings policy, and the Flood Re scheme helps keep it affordable for homes at higher risk. Australia has no direct equivalent of Flood Re. What it does have is a standard definition of flood, introduced after disputes in the Queensland floods of 2010 and 2011, under which flood broadly means water escaping from a watercourse, lake, reservoir, dam or similar.
That definition matters because flood and storm are treated separately. Rainwater running off a hillside into your house, or overflowing gutters, is usually covered under storm. Water rising from a creek or river that breaks its banks is flood. Many policies now include flood by default, but some let you remove it to reduce the premium, and in high-risk areas the flood component can make up much of the cost. Read the product disclosure statement (the full policy wording) and the key facts sheet, which insurers must provide, to see exactly what is and is not included.
The Insurance Council of Australia, the industry body, publishes consumer information on the standard definitions and on what to do after a disaster, and it is a sensible starting point for understanding the terms you will see in a policy.
Storm, hail and cyclone
Storm damage, including hail, wind and lightning, is a standard inclusion in most home policies. Hail is a serious risk across south-east Queensland, northern New South Wales and parts of other states, and a single storm can damage roofs, skylights, solar panels and cars across a whole suburb. Check whether solar panels, fences, retaining walls and outdoor structures are covered, as these are common sources of disappointment.
In northern Australia, cyclone cover is part of the picture. The federal government set up a cyclone reinsurance pool in 2022 with the aim of easing premiums in cyclone-prone areas, though how much difference it makes to an individual premium depends on the insurer and the property. Building standards matter too: a home built or upgraded to modern wind ratings may be viewed more favourably.
One thing British buyers rarely encounter is an embargo. When a cyclone is forming, a bushfire is threatening an area or a major flood is expected, insurers often stop accepting new policies or increases in cover for affected postcodes until the danger passes. If you are buying a house, arrange cover from the date the property becomes your risk under the contract, which varies by state, rather than waiting until a storm is on the radar.
Bushfire cover and rebuilding costs
Fire, including bushfire, is a standard inclusion in Australian home policies. The bigger issue is usually underinsurance. Rebuilding after a bushfire can cost far more than the original build, because a new home in a bushfire-prone area may have to meet construction standards linked to its bushfire attack level, and because demolition, debris removal, temporary accommodation and professional fees all add up. After major fire seasons, demand for builders also pushes prices up.
Most Australian policies are written on a sum-insured basis, so the figure you choose is the most the insurer will pay. Online rebuilding cost calculators are a useful starting point, but treat them as a minimum, particularly for older or architecturally unusual homes. Some policies include a safety margin above the sum insured; check whether yours does and by how much.
The consumer group CHOICE, which publishes independent reviews and buying guides, has practical guidance on home improvement and protecting your property that helps when weighing up the condition and resilience of a house.
Check the risk before you buy
Insurance is one of the clearest signals of how exposed a property is. Before you commit to a purchase, get a quote for the address, not just a general estimate. A premium that seems wildly out of line with similar suburbs often reflects a flood or fire risk the listing did not mention. Our guide to checking flood maps and planning overlays explains where to find the council information that insurers themselves draw on.
When comparing policies, look beyond the headline premium at the excess, exclusions for flood and storm-related damage such as erosion or landslip, limits on contents in outbuildings, and whether temporary accommodation is covered and for how long. If a claim is refused and you disagree, insurers have internal complaint processes, and unresolved disputes can go to the Australian Financial Complaints Authority at no cost to you.
Questions readers ask
Is flood automatically included in Australian home insurance?
Often, but not always. Some policies let you opt out, so check the key facts sheet for the specific policy.
Can I bring my UK insurer with me?
Generally no. You will need a policy from an insurer authorised to operate in Australia and written for Australian conditions.
Why did my insurer refuse a quote this week?
There may be an embargo in place because of a nearby fire, cyclone or flood. Insurers usually lift these once the immediate threat has passed.