Bill's Media Releases

Standard Definition of Flood Regulations Finalised

 The Gillard Government has enacted Regulations that give effect to the standard definition of flood as part of its continuing efforts to make flood insurance simpler and more effective following recent natural disasters.

Regulations were made at last week’s meeting of the Executive Council to provide a standard definition of "flood" for home building and home contents; small business; and strata title insurance contracts.

The regulations include the word "flood" to be used in these insurance contracts to mean:

the covering of normally dry land by water that has escaped or been released from the normal confines of:

  • any lake, or any river, creek or other natural watercourse, whether or not altered or modified; or

  • any reservoir, canal, or dam.


The Minister for Financial Services and Superannuation, Bill Shorten, said "The Government has delivered on its commitment to provide consumers with a standard definition of flood to which all insurers must comply”.

The different uses of the term ‘flood’ in insurance policies has been a source of confusion for many consumers.

This policy will make it much easier for people to know what they are covered for – and what they are not covered for.  If they have flood coverage, they will know that it covers events that fall within the ordinary meaning of the word.

“This has been an issue for decades.  It took this Government to get this done and achieve a solution.”

“A flood is a flood. Never again do Australians want to see a situation, as we saw during the Queensland floods of 2011, where neighbours hit by the same flood get different levels of cover because of technical definitions in an insurance contract.”

The regulations provide for a two year transitional period. This transitional period will provide insurers with a sufficient lead time to:

•           update the content of product disclosure statements;

•           retrain staff; and

•           implement any necessary systems changes.

However, the regulations allow insurers to use the standard definition of flood from today.

Mr Shorten said “While the Government has provided insurers with sufficient time to comply with the new regulations, the Government recognises that many insurers have already adopted the standard definition. The Government supports the move made by these insurers and encourages all insurers to do the same”

Media Contact: Sam Casey 0421 697 660