There’s been a huge amount of media coverage around the oceanfront properties in the Northern Beaches of Sydney that recently took a battering in the East Coast Low storm.
Who’s covered for what damage and who should be paying for repairs is currently a hot topic.
So we spoke to Cheryl Chantry, Executive General Manager, Claims at IAG, about how IAG’s policy coverage helps protect customers from the damage that is caused in these types of situations as well as clarifying where insurance doesn’t provide cover.
Why doesn’t insurance cover damage by the sea?
“Insurance is designed to cover for unexpected risks and unfortunately we have communities that have been built in areas where there are known significant risks, such as impact from the sea, for example: erosion and flooding.
Damage that’s caused by acts of the sea, such as storm surge and king tides, or erosion, are generally not covered by our policies.”
What's a storm surge?
“A storm surge is an increase in the sea level when there is an intense storm or cyclone. When this rises over the land it can cause damage to property.
Similarly king tides cause a predictable rise in the level of the sea and can cause damage to property when the water runs over the land.
The damage caused in Sydney's Northern Beaches, for example, was actually caused by the combination of a king tide with the storm eroding the cliff face which caused the land to collapse resulting in damage."
How is this different from flooding?
“Our personal lines insurance products do cover for flooding.
As a very basic description, flood Insurance provides cover for water that rises up from the ground, whereas storm cover is for water that comes down from the sky.
These are both considered different than damage caused by the sea.”
What can people do who live close to the sea?
“The impact of events like the recent East Coast Low can be devastating to peoples lives so it’s important to be well informed of the risks of the areas they may be living in or may be considering moving to.
People can read their policy or speak to their insurer if they're not confident about the coverage they have in place.”
How does IAG help?
“People who live in properties that are at particular risk usually know they’re choosing to live in an area that is more vulnerable and we work hard with customers when they purchase a policy from us to know what they are and aren’t covered for.
We also do a lot of work with communities and Government bodies to educate around risks such as flooding and erosion and focus on influencing mitigation strategy, for example: not allowing buildings to be built in areas that are at risk, or encouraging the building of flood levees.
We believe that councils should take a different approach and not allow development in areas where there are real concerns about the dangers of erosion or sea damage.
The same is also true about bush fire."
What else can you do if you live in a high-risk area?
It’s important to work with the Government bodies in your local area to make sure the risks in the community that you’re concerned about are flagged.
Get in touch with your local member, write them a letter or send them an email.
Top action tips for severe storms:
- Do your research and don't buy a property that's in a high risk area.
- Make sure you know what your insurance covers you for - check your policy or speak to your insurer.
- If you know a storm is coming, do everything you can to prepare your property. Read some very useful information on getting ready for flooding and severe storms.
- If you do live in a high risk area then work with your local community and council to put in as many protection strategies in place as possible.
Need home insurance? NRMA offers a range of policies.