waterdamagequotesWater damage, flood or escape of liquid: which cover applies
The words you use and the words that decide your claim are not the same words. Five of the six phrases people bring to this problem appear nowhere in the Insurance Contracts Act or its Regulations — a claim you can check in one search, and the reason this page exists.
Somebody whose kitchen is under water does not know yet whether they have an escape of liquid, a storm claim or a flood claim. They only know the floor is wet. Every other page in this section is written for the person who has already worked that out. This one is written for the person who has not.
It matters more than it sounds, because the excess, the sub-limits and sometimes the existence of cover attach to the event, not to the damage. The same wet carpet can be three different claims.
Sixteen ways of saying it, and what each one actually engages
Left column is what you would say on the phone. Middle is what the instrument that decides the claim actually says. Right is what the gap between them does to you.
| What you would call it | What the instrument says | What that difference does |
|---|---|---|
| “Water damage” | Nothing. The phrase is not in the Act or the Regulations— | There is no single water-damage cover. There are the events below, and which one applies decides who pays. |
| “A pipe burst” | bursting, leaking, discharging or overflowing of fixed apparatus, fixed tanks or fixed pipes used to hold or carry liquid of any kindreg 19(1)(a)(vi) | A listed event. The escape is covered; the component that failed usually is not. |
| “Escape of liquid” (the heading on your policy) | Not a statutory term. Appears nowhere in either instrument— | The policy’s heading and the regulation’s wording are different text. For a prescribed contract, s 35 decides what happens when they diverge. |
| “We were flooded” — the creek came over | flood: water that escaped a lake, river, creek, other natural watercourse, reservoir, canal or damreg 34(1) | A defined term, and the definition governs the contract even if the policy says otherwise (s 37B(3)). |
| “The street flooded and it came up the driveway” | Not flood. The water never left one of the seven listed bodiesreg 34(1), by omission | A flood exclusion applied to this water is relying on a definition that does not reach it. |
| “The storm got in” | storm, tempestreg 19(1)(a)(xiv) | A separate event from flood, sitting in the same subparagraph — so a policy can cover one and not the other. |
| “Storm surge” / “king tide” | Not in either instrument. The nearest statutory words are the action of the sea, high waterreg 19(1)(a)(xiv) | A third category again, named separately from both storm and flood. |
| “A tsunami” | tsunamireg 19(1)(a)(xiv) | Named in its own right, alongside the sea and high water. |
| “The ground gave way” | erosion, land slide or subsidencereg 19(1)(a)(xiv) | Named in the same line as the water perils, which is why a landslip after rain is not automatically a flood claim. |
| “It has been leaking for months” | wear and tear, rust or corrosionreg 19(2)(b) | The excluding provision. Most Australian water claims are cut back here rather than declined outright. |
| “Gradual damage” | Not in either instrument— | A policy may use the phrase. The statutory exclusion doing the same work is the wear-and-tear one. |
| “The basin cracked” | accidental damage that is breakage of any fixed glass, fixed shower base, fixed basin, fixed sink, fixed bath, fixed lavatory pan or fixed cisternreg 19(1)(b) | The only accidental damage the regulation names. There is no general accidental-damage event in the list. |
| “Sewage came up the floor waste” | Depends what pushed it back: the building’s own fixed drainage, or a watercourse feeding the mainreg 19(1)(a)(vi) or reg 34(1) | One symptom, two provisions, and frequently two different excesses. |
| “The house was empty” | unoccupied for a continuous period of more than 60 daysreg 19(2)(f) | Removes four of the fourteen listed events, including the burst-pipe one. |
| “The fence blew over” | a free-standing or retaining wall, a gate or a fence, as a result of a storm or tempestreg 19(2)(g)(i) | Outside standard cover. Whether your policy adds it back, and with what limit, is on its Key Facts Sheet. |
| “Mould” | Not a peril. Not named as an event anywhere in reg 19— | Always a consequence. It follows whatever made the building wet, up to whatever limit your own policy sets for it. |
The words you searched for are mostly not in the law
That is not a rhetorical flourish. It is a count. Both instruments were downloaded from the Federal Register of Legislation and searched on 21 September 2026:
| Phrase | Insurance Contracts Act 1984 | Insurance Contracts Regulations 2017 |
|---|---|---|
| “escape of liquid” | 0 | 0 |
| “water damage” | 0 | 0 |
| “storm surge” | 0 | 0 |
| “gradual damage” | 0 | 0 |
| “sudden and accidental” | 0 | 0 |
| “accidental damage” | 0 | 6 |
Insurance Contracts Act 1984 (Cth) and Insurance Contracts Regulations 2017 (Cth), full-text search · searched 21 September 2026
Measured by downloading the full text of both instruments from the Federal Register of Legislation and searching them. “Accidental damage” is the only one of the six that appears anywhere, and only in the Regulations, where it is confined to breakage of fixed glass and fixed sanitary ware.
Five of the six phrases most people bring to this problem appear nowhere in either instrument. The sixth, accidental damage, appears only in the Regulations and only in one narrow place — breakage of fixed glass and fixed sanitary ware, at reg 19(1)(b).
The practical consequence: searching your policy for the phrase in your head will usually fail, and concluding from that that you are not covered is a mistake. Search for the event instead.
When the policy’s word and the regulation’s word differ
Three provisions decide this, and they are not widely written down anywhere.
The regulation’s list has teeth
Insurance Contracts Act 1984 (Cth) s 35(1) · compilation of 1 March 2024, read 21 September 2026
This is the provision that makes the reg 19 list mean anything. Where a claim is made under a prescribed contract and the event is a prescribed event, the insurer may not refuse to pay an amount equal to the minimum amount by reason only that the contract gave less cover, or none.
This is the provision that makes reg 19 mean anything at all. Without it the list would be a description of market practice; with it, a prescribed contract is taken to cover the listed events up to the minimum amount.
And an escape hatch, which is the whole game
Insurance Contracts Act 1984 (Cth) s 35(2) · compilation of 1 March 2024, read 21 September 2026
The carve-out, and it is the whole game. Subsection (1) does not apply where the insurer proves that, before the contract was entered into, it clearly informed the insured in writing — or the insured knew, or a reasonable person in the circumstances could be expected to have known — that the cover would be less, or that there would be none.
So an insurer can sell you less than the list. What it cannot do is sell you less quietly. If it wants out of a prescribed event it has to prove it clearly informed you in writing beforehand, or that you knew, or that a reasonable person in the circumstances could be expected to have known.
And if the wording is ambiguous, it is read against the insurer
Insurance Contracts Act 1984 (Cth) s 36 · compilation of 1 March 2024, read 21 September 2026
If a question arises whether an event is a prescribed event, the relevant provisions of the regulations are construed as though they were provisions of a contract put forward by the insurer. In other words the ordinary rule that ambiguity is read against the drafter is applied to the regulations themselves, on the insurer’s side of the argument.
Worth pausing on. Where there is a genuine question whether your event is a prescribed event, the regulations are construed as though the insurer had drafted them.
Flood has its own disclosure machinery
Flood is the one peril Parliament singled out for special treatment, and it produced four provisions that between them are the strongest consumer position in this whole area.
The definition governs the contract
Insurance Contracts Act 1984 (Cth) s 37B(1)–(3) · compilation of 1 March 2024, read 21 September 2026
Subsection (1) requires the regulations to define flood. Subsection (2) applies that meaning in a prescribed contract and in any notice, document or information the insurer gives about it. Subsection (3) says that holds even if the contract gives the word a different meaning.
Seven water bodies, no more — the flood definition page sets out the list and what falls outside it.
The insurer must tell you in writing whether you have it
Insurance Contracts Act 1984 (Cth) s 37C · compilation of 1 March 2024, read 21 September 2026
Before entering into a prescribed contract the insurer must clearly inform the insured in writing whether the contract covers loss or damage caused by, or resulting from, flood as the regulations define it. Not on request — before.
Partial flood cover is taken to be full flood cover
Insurance Contracts Act 1984 (Cth) s 37D(1)–(3) · compilation of 1 March 2024, read 21 September 2026
If a prescribed contract carries provisions covering one or more flood events, those provisions are taken to provide cover for flood as defined by the regulations, and the insurer may not refuse a flood claim by reason only that the event was not otherwise covered.
Read that slowly. If the contract covers loss from one or more flood events, those provisions are taken to cover flood as the regulations define it — whether or not the contract says so expressly.
And where there are several flood limits, the highest applies
Insurance Contracts Act 1984 (Cth) s 37D(4)–(5) · compilation of 1 March 2024, read 21 September 2026
Where a prescribed contract sets different maximum amounts for different flood events, those provisions are taken to give a maximum equal to the highest of them, and the insurer may not refuse to pay up to that amount by reason only that the particular event carried a lower limit.
The drying does not wait for the vocabulary
Four digits, and restoration companies advertising for your postcode call you back.
There is a statutory one-pager that answers this for your policy
Almost nobody asks for it, and the insurer commits an offence by not providing it.
What it is
Insurance Contracts Act 1984 (Cth) s 33B · compilation of 1 March 2024, read 21 September 2026
A document containing the information the regulations require, in the form the regulations prescribe. For home buildings that form is Form 1 in Schedule 5 of the Insurance Contracts Regulations 2017; for home contents it is Form 2.
Reg 12 goes further than you would expect: it prescribes the content, and also that the document is A4, set in Arial, with the “KEY FACTS” heading at 18 point, the word “STEP” at 16, the step number at 48, and the body at 10. A regulation that specifies font sizes is a regulation written by people who had seen insurers bury this information before.
You can have it within 14 days of asking
Insurance Contracts Regulations 2017 (Cth) reg 13(2) · 2021 compilation, read 21 September 2026
The insurer must give you a Key Facts Sheet as soon as reasonably practicable and no later than 14 days after you first request information about the contract, or after you enter into it. Asking costs nothing.
And it should already be on the insurer’s website
Insurance Contracts Regulations 2017 (Cth) reg 13(4) · 2021 compilation, read 21 September 2026
If the insurer has a website accessible by the public it must keep the most current copy of each Key Facts Sheet for a prescribed contract on it, in a downloadable format. So you can read one before you are a customer, and you can compare two policies without speaking to anybody.
Not providing it is a civil penalty contravention
Insurance Contracts Act 1984 (Cth) s 33C(1) · compilation of 1 March 2024, read 21 September 2026
The obligation to provide a Key Facts Sheet carries a civil penalty of 5,000 penalty units. It is not a courtesy.
The Act states the penalty in penalty units rather than dollars, and the dollar value of a penalty unit is set elsewhere and indexed. No dollar figure is published here, because none was read.
What to do with this. Before you argue with anybody about what your policy covers, download your own Key Facts Sheet. It is a one-page, statutorily formatted answer to the exact question this page is about, and it is the insurer’s own document rather than anyone’s interpretation of it.
Working out which one is yours
Three questions get almost everybody to the right row of the table above.
- Where was the water immediately before it was in your building? Inside a pipe, tank or appliance fixed to the building? That is reg 19(1)(a)(vi). In the sky? Storm. In a creek, river, lake, reservoir, canal or dam? Flood, as reg 34(1) defines it. On the ground, having come from none of those? Not flood.
- How long had it been happening? Sudden points at the event provisions; months points at reg 19(2)(b).
- Was anybody living there? More than 60 continuous days empty and reg 19(2)(f) removes four of the fourteen events before you get to any of this — which four, and what to do about it.
The cover check asks those three and three more, and names the provision that governs. It runs in your browser and sends nothing anywhere.
Where each of these goes next
Eighteen scenarios
The same provisions applied to eighteen things that actually happen to houses.
What flood legally means
The seven water bodies, and why the product disclosure statement does not get to redefine the word.
Storm, flood, escape of water
Three claims, what changes between them, and what to write on the claim form.
Excess
Why the event decides the excess, and how one water event produces two of them.
Mould
Never a peril, always a consequence, and capped much lower than you expect.
What the drying costs
Published Australian rates, and a calculator that shows every line it adds.
Why this site has nothing to gain from your answer. We are paid a fixed amount for each enquiry, agreed before it is sent. It does not move with the size of the job, with whether you go ahead, or with which company you pick. There is no version of this page where steering you is worth anything to us — which is also why the page tells you when the answer is that you do not need anybody.
Get the drying quoted while you work out the word
Whichever provision turns out to govern, the building is wet now. Two steps, and companies advertising for your postcode call you back.
Your enquiry is ready to send
Here is what happens after you submit:
- Your answers go to restoration companies that advertise for your postcode.
- No more than three of them may contact you, using the details you gave.
- You decide who, if anyone, you use. You are committed to nothing, and this does not lodge, alter or affect an insurance claim.
We are not a restoration company and we do not attend, assess or repair anything.
Common questions
Is there such a thing as water damage cover in Australia?
Not as a single named thing. The Insurance Contracts Regulations 2017 list fourteen events for home building standard cover at reg 19(1)(a), and several of them involve water: escape from fixed pipes at subparagraph (vi), and storm, tempest, flood, action of the sea, high water and tsunami at subparagraph (xiv). Which one applies to your situation decides who pays. The phrase “water damage” itself appears nowhere in the Act or the Regulations.
What does escape of liquid mean on my policy?
It is a heading policy documents use. It is not a statutory term — it appears nowhere in the Insurance Contracts Act 1984 or the Insurance Contracts Regulations 2017. The statutory wording covering the same ground is reg 19(1)(a)(vi): the bursting, leaking, discharging or overflowing of fixed apparatus, fixed tanks or fixed pipes used to hold or carry liquid of any kind.
Is storm surge the same as flood?
No. Neither phrase does the work you would expect. “Storm surge” is not in either instrument; the nearest statutory words are “the action of the sea” and “high water”, which reg 19(1)(a)(xiv) names separately from both storm and flood. Flood is defined at reg 34(1) as water that escaped from one of seven listed water bodies.
How do I find out what my own policy covers, event by event?
Ask for the Key Facts Sheet. It is a statutory document: s 33B of the Insurance Contracts Act defines it, reg 12 prescribes exactly what it contains and how it is laid out, and reg 13(2) requires the insurer to provide it within 14 days of you asking about the contract. Reg 13(4) requires an insurer with a public website to keep the current version on it, downloadable.
If the policy defines a word differently from the regulation, which wins?
For flood, the regulation — expressly. Section 37B(3) applies the statutory meaning to a prescribed contract even where the contract, or a notice or document the insurer gave you about it, provides a different one. For the other events, s 35 does related work: the insurer cannot refuse to pay the minimum amount for a prescribed event merely because the contract gave less cover, unless it clearly informed you in writing before you entered into it.
Why does it matter which word applies if the damage is the same?
Because the excess, the sub-limits and sometimes the existence of cover all attach to the event, not to the damage. The same wet carpet can be an escape of water, a storm claim or a flood claim depending only on where the water came from. Whether your policy prices or excepts those three differently is on its Key Facts Sheet, which reg 13(4) obliges an insurer with a public website to publish in a downloadable form.
Sources cited on this page
- Insurance Contracts Regulations 2017 (Cth)
- Insurance Contracts Act 1984 (Cth)
- Insurance Contracts Regulations 2017 (Cth) reg 34(1)
- Insurance Contracts Act 1984 (Cth) s 35(1)
- Insurance Contracts Regulations 2017 (Cth) reg 13(2)
- Suncorp, “Escape of Liquid” (public events-explained page)
- General Insurance Code of Practice (2020 Code, October 2023 update)
Every figure above was read from the source it is attributed to on 20 September 2026. How we check this.