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My home and contents have been damaged by water — what do I need to know?

Many insurance policies provide coverage for damage to property caused by floodwater. If flood cover is part of your insurance policy, your claim should be paid. Some insurance policies allow you to opt out of flood cover.

If flood cover is not part of your insurance policy, seek legal advice. If you wish to dispute the amount the insurer is paying you for your claim, seek legal advice.

What laws apply to insurers?

The Insurance Contracts Act (“the Act”) sets out the ways in which insurers must behave. The main aspects of the Act relevant to water damage claims are explained below:

  • Duty on the insurer to act in good faith.

    Section 13 of the Act imposes a duty on both the insurer and you, the consumer, to act in the utmost good faith towards each other.

    The duty of utmost good faith can help you by allowing you to argue that your insurer should:

    • specifically advise you of any unusual parts of the policy (especially exclusion clauses that would allow the insurer to deny a claim)
    • act quickly and reasonably in deciding any claim.
  • The insurer must pay for floodwater damage under a standard cover contract.

    If an insurer has failed to clearly inform you that floodwater damage is excluded under your policy, section 35 of the Act may help you establish that the insurer should pay for flood damage. Section 35 of the Act requires the insurer to notify you, as the customer, of any deviations from the minimum cover provided under standard cover contracts. For more information, read the “What if my policy is confusing or I didn’t get a copy?” section of this guide.

Apart from the Insurance Contracts Act, insurers are subject to the General Insurance Code of Practice. This guide refers to the Code where it can assist you with your claim.

Last updated 22 March 2022

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