Insurance and managing flood risk
Revised Draft Victorian Floodplain Management Strategy Information
Sheet
The Victorian Government is seeking public feedback on the Revised Draft Victorian Floodplain
Management Strategy.
The proposed policies, actions and accountabilities set the policy direction for floodplain
management in Victoria. A Draft Strategy was released on 26 June 2014 for a six-week
public comment period. Submissions and feedback at public information sessions identified a
number of opportunities to revise the draft Strategy.
The following changes have been incorporated into the Revised Draft Strategy:
 revised rural levee policy
 updates to the chapter relating to stormwater flooding in Melbourne and regional Victoria
 an acknowledgement of the value of Aboriginal communities.
 adapting to climate change to manage flood risk
 clarification around emergency management roles and responsibilities
 guiding principles to support catchment management authority (CMA) role in land use
planning clarification of responsibilities for maintenance of flood warning gauges
 consideration of the environmental benefits of flooding.
This handout sets out the proposals in the Strategy that relate to Aboriginal cultural values and
floodplain management.
The Strategy aims to better prepare Victoria for severe flooding by improving the evaluation and
communication of flood risks. In this way it aims to enable communities and relevant agencies to
take better-informed actions to manage floods.
The Strategy builds on important lessons from the 2010, 2011 and 2012 floods. It also integrates the
outcomes of the subsequent review into the effectiveness of flood warning and response systems,
and the inquiry into flood mitigation infrastructure.
Image deleted: Mitchell River flooding, Bairnsdale. Source: West Gippsland CMA
The role of government
Governments have a role in fostering an appropriate flood insurance regime for Australia so that:
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individuals and communities affected by floods are able to recover and rebuild as quickly as
possible
people are able to choose where they live in an informed way (the relative size of flood
insurance premiums in different locations provides an important signal in this regard)
individuals and communities at risk of future flooding are aware of the risks and are able to
obtain suitable protection against those risks, both in terms of having access to insurance
and in benefiting from appropriate mitigation strategies.
To that end, the Australian Government recently introduced a standard definition of flood for
inclusion in all insurance policies offering flood cover.
The Insurance Council of Australia (ICA), which represents more than 90% of the total premium
income written by private sector general insurers, has a 10-point plan aimed at developing a more
effective and sustainable response to disasters in Australia.
The ICA believes that government has three key roles in supporting flood insurance:
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ensure the availability of high-quality information about flood risk
mitigate the legacy of existing flooding exposure [see the related information sheet on levee
management]
prevent the flood-prone population expanding [see the related information sheet on land
use planning].
Working with the insurance industry
There is particular scope for improving the availability of, and access to, high-quality information
about flood risk. This is partly a result of the ongoing revolution in information management and
partly a consequence of the relative infancy of the flood insurance industry in Australia.
DELWP will work with the insurance industry to share flood data in an efficient and practical manner.
For example, it will provide the insurance industry with access to all digital elevation data and flood
mapping held by DELWP. This approach was supported by the Insurance Australia Group’s
submission on the draft strategy: “After the DSE gave IAG access to GIS flood map data for Benella in
North-East Victoria we were able to reduce average flood premiums for the 5,000 affected
addresses by 44%.”
DEWLP will seek ongoing access to the National Flood Information Database, used by most insurers
as a core input to assessing flood risk at property level. DELWP will also work with the insurance
industry to ensure insurance premiums consider the benefits of flood mitigation works that are
formally managed and flood risk profiles based on a range of floods (and the associated
probabilities).
Proposed Policy 20a
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The Victorian Government will work with the insurance industry to share flood data in an
efficient and practical manner, including access to digital elevation data and flood mapping
held by DELWP.
Proposed Policy 21a
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The Victorian Government will seek to ensure that individuals can have full disclosure of the
flood risks associated with their property, not just information relating to the 1% Annual
Exceedance Probability flood.
Proposed Action 20a
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DELWP will seek ongoing access to the National Flood Information Database, used by most
insurers as a core input when assessing flood risk at the address level across Victoria.
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DELWP will work with the insurance industry to ensure that insurance premiums take
account of the benefits of formally managed flood mitigation infrastructure as well as the
mapped flood risk profiles for individual properties.
Image deleted: Aerial view of floodwaters in the Victorian town of Rochester on 17 January 2011
after four rivers in the region broke their banks, resulting in widespread flooding. Source: Newspix
Disclosing flood risk information
The Victoria Flood Database contains numerous maps of modelled flood extents for a range of floods
from moderate to extreme. The starting point for disclosing flood risk information is to make sure
that these maps are in the public domain and readily accessible.
Individuals armed with high-quality information about their exposure to flood risks ought to be in a
position to negotiate insurance premiums that reflect that risk. They can now seek this information
from catchment management authorities.
In an ideal world, insurance premiums would vary with the mapped range of flood probabilities from
moderate to extreme. Insurers would, however, have to take account of the less-certain risk of
flooding associated with urban drainage systems on top of the better-understood risks of riverine
flooding.
To encourage property owners to take an active interest in ensuring that their insurance premiums
are tailored to their flood risks, DELWP will seek to ensure that individuals can have full disclosure of
the flood risks associated with their property.
How to get a copy
Detailed information on Insurance and managing flood risks as well as a range of matters relating to
floodplain management in Victoria can be found in the Revised Draft Victorian Floodplain
Management Strategy, available at www.delwp.vic.gov.au/revised-draft-floodplain-managementstrategy or by calling the Department of Environment, Land, Water & Planning customer service
centre on 136 186.
List of available information sheets
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Overview of the Revised Draft Victorian Floodplain Management Strategy
Aboriginal cultural values and floodplain management
Land use planning and floodplain management
Insurance and managing flood risks
Environment and floodplain management
Total Flood Warning Systems
Managing levees and waterways in rural areas
Managing levee and waterways in urban areas outside Melbourne
Your chance to have a say
The Victorian Government welcomes feedback on the Revised Draft Victorian Floodplain
Management Strategy. Submissions must be in writing and may be emailed to
VMFS.Inquiry@delwp.vic.gov.au or sent to:
Victorian Floodplain Management Strategy
PO Box 500
East Melbourne VIC 3002
The closing date for submissions is 8 August 2015.
You need to know:
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The information you provide in your submission, or in any other response, will only be used
by DELWP and the Interdepartmental Stakeholder Reference Group to consider as part of
the development of the final strategy. However, it may be disclosed to other relevant
agencies
as part of the consultation process.
All submissions will be treated as public documents and will also be published on the
internet for public access.
All addresses, phone numbers and email details will be removed before submissions are
published on the internet. Formal requests for confidentiality will be honoured but freedom
of information access requirements will apply to submissions treated as confidential.
If you wish to access information in your submission once it is lodged with DELWP, contact the
project team at the above address.