
Floods can turn lives upside down in an instant.
If you’ve been watching the news lately, you’ll know NSW has been hit hard by severe weather which started last May 18. Â
From the Mid North Coast to the Hunter regions, communities are grappling with the aftermath of devastating floods.
This led the Insurance Council of Australia (ICA) to upgrade the classification of the said major flooding from a Significant Event to an Insurance Catastrophe.
What does this entail?
Let’s make sense of what an Insurance Catastrophe declaration means, how it affects flood recovery in NSW, and why it matters to homeowners, businesses and anyone thinking about insurance.Â
What Is an Insurance Catastrophe Declaration?

When floods, storms or other natural disasters strike, the ICA may declare an event a Significant Event or escalate it to an Insurance Catastrophe.Â
This isn’t just jargon. It’s a signal that the insurance industry is stepping it up to help affected communities.
On May 21, the ICA declared the NSW Mid North Coast and Hunter regions’ severe weather and flooding a Significant Event, which was later escalated to an Insurance Catastrophe as claims reached over 4,000.Â
This declaration usually covers areas where flood waters caused widespread damage.Â
What does this possibly mean for you?

- Prioritised Claims: A Catastrophe declaration means insurers fast-track claims, focusing on the worst-affected policyholders first.
This helps ensure that urgent cases get attention quickly like homes or businesses with severe damage. - More Resources: Insurers often bring in extra staff, claims assessors and even interstate builders to speed up the process.
For example, the ICA, in collaboration with several insurers, opened an insurance hub at Taree Leagues Sports Club which began operating yesterday, May 27, and will last until June 13. No appointments are needed and services are available from 10:00 A.M. to 5:00 P.M. - Community Support: The ICA works with local agencies to coordinate recovery efforts, ensuring policyholders aren’t neglected.Â
This declaration helps streamline the insurance process when time is of the essence.
How Does It Help Flood Recovery in NSW?

The recent flooding in the Mid North Coast and Hunter regions damaged around 10,000 properties and left 50,000 people isolated.Â
The Insurance Catastrophe declaration plays a critical role in helping communities get back on their feet.Â
Here’s how:
- Faster Claims Processing: With thousands of claims, the declaration makes sure that insurers prioritise urgent cases.
Say, if your home in Port Macquarie is uninhabitable, your claim could be processed ahead of less severe cases. - On-the-Ground Support: Insurers send teams to affected areas to assess damage and assist policyholders.
The government also sends emergency services personnel, the Australian Defense Force (ADF), and community volunteers to provide help to affected communities. - Financial Relief: For businesses and homeowners, quick claims payouts mean you can cover repairs, replace lost items or even secure temporary accommodation.
This is vital when flood damage disrupts your life or livelihood. - Coordination with Government: The declaration aligns insurance efforts with government support, such as the Australian Government Disaster Recovery Payment (AGDRP) and the Disaster Recovery Allowance (DRA).
The AGDRP offers a one-off payment of $1,000 for every eligible adult and $400 for every eligible child, while the DRA provides up to 13 weeks of income support for workers and sole traders who’ve suffered from lost income due to the floods.
To check your eligibility, you can visit the Natural Disaster Support of Services Australia.
Why It’s Important

Whether you’re a homeowner, a small business owner or someone considering insurance, the Insurance Catastrophe declaration can have a direct impact on your recovery journey.Â
Here’s why it’s worth paying attention:
- Homeowners: If your property is damaged, the declaration means your claim can be prioritised, and you might get access to emergency funds or temporary accommodation.
But here’s the catch: your policy needs to cover flood damage.
Many standard Home and Contents Insurance policies in Australia include flood cover, but some don’t, so it’s worth checking your Product Disclosure Statement (PDS). - Businesses: Floods can halt operations, costing you revenue or income.
The declaration can speed up claims for business interruption or property damage, helping you get back to work. - Future Insurance Buyers: If you’re uninsured or underinsured, the rising frequency of floods in NSW can be a wake-up call.
Prime Minister Anthony Albanese noted that getting insurance for extreme weather is becoming a ‘real challenge’ due to climate change.
That’s where working with insurance brokers can make a difference, assisting you in finding policies that balance coverage and affordability.
As observed, floods are becoming more frequent and intense.
In fact, the ICA reported that the amount of insured losses, due to extreme weather events this 2025, reached $1.5 billion.
Without insurance, recovery can be a long, expensive road.
Tips for Navigating Flood Recovery with Insurance

As an insurance broker, we’re here to guide you through the process.Â
If you’re in a flood-affected area or want to be prepared for the future, here are some practical steps you can do:
- Prioritise Safety First: Before doing anything, ensure it’s safe to return to your property.
The State Emergency Service (SES) advises against entering flood-affected areas until authorities give the all-clear.
If water has entered your home, don’t turn on electricity until a qualified electrician has inspected it. Similarly, avoid driving vehicles that may have water damage.
Always keep in mind that your safety is the top priority. - Lodge Your Claim as Soon as Possible: Contact your insurer as soon as it’s safe.
You don’t need a full damage assessment to start the process.
Take photos or videos of the damage for evidence, but don’t risk your safety.
Insurance brokers can also help you contact your insurer and make certain you have the necessary policy details. - Document the Damage Thoroughly: Take clear photos or videos of all damage to your property and belongings.
Make a detailed list of affected items, including brands, models and serial numbers if possible. This helps assessors process your claim faster.
If you need to dispose of items, be it water-damaged carpets or furniture, due to health risks, keep a small sample (e.g., a piece of carpet) for the assessor. This evidence is crucial for your claim. - Start Clean-Up When Safe: You don’t need to wait for an assessor to begin cleaning up.
Remove water-damaged items that pose health risks, such as mouldy soft furnishings, but document them first.
Starting clean-up early can prevent further damage, which could strengthen your claim. - Avoid Unauthorised Repairs: Don’t start repairs without your insurer’s approval as unauthorised work might not be covered.
If emergency repairs are needed, get written permission from your insurer first.
Brokers can assist in coordinating with your insurer to ensure repairs are handled correctly. - Keep Track of Expenses: If your policy covers emergency accommodation or other expenses, keep receipts for any costs incurred due to the flood.
Some policies may provide payments for spoiled food or temporary housing, so check with your insurer or ask insurance brokers to help you confirm these details. - Understand Your Policy Coverage: Not all insurance policies include flood cover, so check your policy documents or speak with an insurance broker to verify what’s included and what’s not.
After all, it’s important to discuss potential gaps. - Beware of Scammers: After disasters, fraudsters may pose as builders or assessors.
Always ask for identification and check with your insurer before agreeing to services. - Seek Support if Issues Arise: If your claim is delayed or rejected, don’t hesitate to seek help.
You can contact the Australian Financial Complaints Authority (AFCA) for free assistance in resolving disputes with insurers.
Plus, brokers can advocate on your behalf for a fair outcome.
Beyond insurance, there are programs that can provide extra help like the AGDRP and DRA.
- Prepare an Emergency Kit: Include important documents, including insurance policies and essentials such as food and medication, to stay prepared for sudden evacuations.
- Stay Informed: Download the Hazards Near Me app for real-time flood warnings and follow your state’s respective SES advice during emergencies.
The Bigger Picture: Insurance and Climate Change

The increase in climate temperature means that there’s more moisture in the atmosphere, causing heavy rainfall and flooding during extreme weather events.
The occurrence of frequent disasters then lead to rising premiums.Â
This is why the ICA is pushing for a $30.15 billion Flood Defence Fund to build better infrastructure in high-risk areas like NSW, Queensland and Victoria.
How Can Tank Insurance Help You

At Tank Insurance, our job is to find you the right coverage at the best price.
We tailor policies to your needs, whether you’re protecting your home, business or both.
We also help you navigate the complexities of insurance and claims process, so you can bounce back with confidence.
If you’re in a flood-prone area or you want to prepare for whatever the future may bring, we can:
- Review your current policy to ensure it covers floods and other risks.
- Compare options from trusted insurers to find affordable coverage.
- Guide you through the claims process if you’ve been affected by flood or other perils.
Reach out to us now for expert advice and guidance, and work with us to learn more about your coverage or to explore your options.