Insurance and managing flood risk
Draft Victorian Floodplain Management Strategy
The Victorian Government is seeking public feedback on the Draft Victorian Floodplain
Management Strategy.
The proposed policies, actions and accountabilities set the policy direction for floodplain
management in Victoria.
This handout sets out the proposals in the draft strategy that relate to insurance and managing
flood risk.
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.
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 Commonwealth 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].
Image deleted. Properties flooded in Culgoa Source: Mallee Catchment Management Authority
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.
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In that context, DEPI 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 held by DEPI and all flood mapping held by DEPI. It will also seek ongoing
access to the National Flood Information Database, used by most insurers as a core input to
assessing flood risk at the property level across Victoria.
DEPI will also work with the insurance industry to ensure insurance premiums consider the
benefits if flood mitigation works that are formally managed and flood risk profiles based on a
range of floods (and the associated probabilities).
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 CMAs.
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, DEPI will seek to ensure that individuals can have full
disclosure of the flood risks associated with their property.
Detailed information on Insurance and managing flood risks and a range of matters relating to
floodplain management in Victoria can be found in the Draft Victorian Floodplain Management
Strategy, available at www.vic.gov.au/floodplainmanagementstrategy or by calling the
Department of Environment and Primary Industries customer service centre on 136 186.
Your chance to have a say
The Victorian Government welcomes feedback on the Draft Victorian Floodplain Management
Strategy. Submissions must be in writing and may be emailed to VMFS.Inquiry@depi.vic.gov.au or
sent to:
Victorian Floodplain Management Strategy
PO Box 500
East Melbourne VIC 3002
The closing date for submissions is Monday 11 August 2014.
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 DEPI 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.
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All submissions will be treated as public documents and will also be published on
the internet for public access.
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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 DEPI, you may
contact the project team at the above address.
© The State of Victoria Department of Environment and Primary Industries 2014
This work is licensed under a Creative Commons Attribution 3.0 Australia licence. You are free to re-use the work
under that licence, on the condition that you credit the State of Victoria as author. The licence does not apply to
any images, photographs or branding, including the Victorian Coat of Arms, the Victorian Government logo and
the Department of Environment and Primary Industries logo. To view a copy of this licence, visit
http://creativecommons.org/licenses/by/3.0/au/deed.en
Printed by Impact Digital, Brunswick
ISBN 978-1-74146-065-0 (Print) 978-1-74146-066-7 (pdf)
Accessibility
If you would like to receive this publication in an alternative format, please telephone the DEPI Customer Service
Centre on 136186, email customer.service@depi.vic.gov.au or via the National Relay Service on 133 677
www.relayservice.com.au. This document is also available on the internet at www.depi.vic.gov.au
Disclaimer
This publication may be of assistance to you but the State of Victoria and its employees do not guarantee that the
publication is without flaw of any kind or is wholly appropriate for your particular purposes and therefore disclaims
all liability for any error, loss or other consequence which may arise from you relying on any information in this
publication.