Allianz Streamlines Flood Insurance with New Update

1

Under this new scheme, individuals residing in regions marked as either moderate or low risk, who have previously not elected flood coverage, will henceforth have it included as part of their standard package. Allianz projects a marginal rise in premiums due to this update. They estimate that policyholders in low-risk zones could expect an increase of under $20 annually pre-tax, while those in moderate-risk areas may see a less than $100 addition to their yearly premiums before taxes.

The insurance company has expressed its aim through this move to instill greater assurance among policyholders concerning flood protection, covering both scenarios of excessive rainwater accumulation and riverine floods. For homeowners located in areas recognized as high-risk and without existing flood coverage, the current policy will remain unchanged due to potentially steep premium costs that could undermine their capability to maintain home insurance.

Allianz has also proposed alterations in flood exclusions, which will cover rainwater run-off alongside the traditional flood coverage, eliminating the prerequisite for hydrology reports. This is expected not only to trim down assessment times in case of claims but also to resolve some confusion regarding the extent of coverage during flood events.

The insurer's reflection on the viability of optional flood coverage, a topic of concern since last autumn, triggered this overhaul. By cutting out optional coverage, Allianz plans to outrun the excessive delays and misunderstandings that arose from sorting out coverages during past floods, particularly when distinguishing between riverine flooding and rainwater build-up.

Industry counterparts like IAG's NRMA Insurance and the RACV in Victoria offer ground-up water damage protection—accounting for flooding, rainwater, and storm surges—for home products in specific locations, with some exceptions for customer opt-outs. On the contrary, Suncorp maintains flood coverage as a compulsory feature in its home insurance suite, with the possibility for high-risk AAMI customers to withdraw from it.

This revised approach by Allianz, which unfortunately required over a thousand hydrology analyses post the 2022 floods, is expected to enhance policy clarity and accelerate the claims process. As insurance companies continue adapting their strategies post-catastrophe, suitable disaster responses remain a crucial focus for the industry.

Published:Thursday, 16th May 2024
Source: Paige Estritori

Share this news item:

Insurance News

Clear

Asbestos Scare Leaves Hospitality Business Uninsured 04 Jul 2025: Paige Estritori The discovery of asbestos-contaminated mulch in a Sydney park led to the cancellation of a festival, resulting in significant financial losses for a hospitality business. Despite these setbacks, the company's claim for coverage under its business interruption (BI) policy was rejected. - read more

Landmark NSW Decision: Dog Walking Costs Covered in Car Crash Injury Claims 03 Jul 2025: Paige Estritori In a groundbreaking decision by the NSW Personal Injury Commission, an insurer has been directed to cover the costs of dog walking services for a car crash victim. The commission ruled that these services classify as domestic assistance under the state’s Motor Accident Injuries Act. This case could pave the way for broader interpretations of 'attendant care services' for claimants. - read more

Extreme Weather Drives $1.8 Billion in First Half Losses for Australian Insurers 03 Jul 2025: Paige Estritori Extreme weather events in Australia have resulted in significant financial impacts for insurers, tallying $1.83 billion in losses during the first half of the year. This comes as insurance companies gear up for further claims linked to ongoing severe weather in New South Wales. - read more

ClearView Names New Underwriting Head Amidst Strategic Changes 30 Jun 2025: Paige Estritori ASX-listed life insurer ClearView has announced the appointment of Peter Tilocca as Head of Underwriting, coinciding with key updates to its underwriting standards and definitions. Tilocca's extensive two-decade career in Australian underwriting includes leadership roles at Zurich, Noble Oak, One Path Life, and RGA Australia. His new role with ClearView commenced on 30 June. - read more

Ombudsman Supports Theft Claimant in Home Business Coverage Dispute 30 Jun 2025: Paige Estritori A recent case has seen a policyholder triumph over her insurer after the Australian Financial Complaints Authority (AFCA) ruled in her favour following a contentious dispute regarding home business operations. The controversy arose when the woman's theft claim was denied by her insurance provider, IAG, over allegations of fraudulent misrepresentation about the use of her rental property. - read more