Flooding and insurance

In recent years the main reason for premium rises relates to the cost of claims from recent extreme weather events. Over the same period the costs of repairs have also increased significantly. These cost increases affect the price of reinsurance that Australian Insurance companies pay to larger global insurers.

The insurance industry uses a range of information to make decisions around property insurance premiums. Some insurance companies determine premiums based on post codes whilst other insurance companies set insurance premium prices based on the risk characteristics of an individual property.

Council believes that it is important that the best and most current flood mapping information should be made available to the insurance industry. When Insurance companies use out of date flood mapping this can lead to outcomes where insurance premiums do not reflect an improved situation.

Detailed flood mapping can empower property owners to understand the flood risk present at their property and whether a quoted insurance premium reflects that risk.

When insurance companies use detailed flood mapping and calculate the premium based on the risk at the property, it can have a positive impact on insurance pricing. This is particularly the case for recently built homes that have complied with planning scheme requirements for minimum floor levels.

If you are concerned that your insurer may not be accurately accounting for flooding on your property, we encourage you to:

• check Council’s flood risk mapping
• provide insurance companies copies of your building plans that show the floor level to be above the defined flood level set by Council. The defined flood level can be obtained through Development.i or a paid flood information search.
• seek quotes from at least two other insurance companies. Insurance companies are constantly managing their portfolio risk profiles and from time to time they will be looking to reduce their risk exposure to certain types of customers and at other times they will be looking to take on new customers. Shopping around empowers the homeowner to find a provider who is looking for customers.

Locations of recent development

Council flood mapping reflects the current conditions on the ground as accurately as possible. Council can only update mapping for recent development areas when Council has received new aerial laser survey information that includes those development areas. For this reason, there is often a lag in Council mapping being updated for these areas. 

In recent years Council has required developers to provide tabulated information for lots in areas identified as recent development areas in our flood mapping. This information is used for people building homes who need to be told the minimum floor level. This level is often available through Development.i but in some more complex situations it may require a manual flood information search, which is provided as a paid service.

If you live in a recently developed area and you suspect that insurance companies are pricing their premiums based on pre-development information, please discuss this with your insurer to determine if they need to revise their quote. Sometimes a letter from Council advising that the property is in a recent development area may assist. If this is the case, email us at hydrology@sunshinecoast.qld.gov.au.

More information

The Floodplain Management Association and the Insurance Council of Australia have prepared the following fact sheets in relation to flood insurance.

• Inland communities (PDF, 236KB)
• Coastal communities (PDF, 237KB).