Why 1 in 3 NSW Homes Are Underinsured Against Flood and Storm Damage

When storms sweep across New South Wales, the financial impact often lingers long after the skies clear.
A growing number of homeowners are discovering that their “comprehensive” home insurance doesn’t actually cover the full cost of rebuilding or replacing their possessions.

The Scale of Underinsurance

The Insurance Council of Australia (2025) estimates that one in three NSW homes are underinsured, meaning their coverage falls short of the amount needed to fully rebuild after a major weather event.
In some regional areas, the shortfall is as high as 40 percent.

Rising construction costs, outdated valuations, and confusion around “storm” versus “flood” coverage are the main culprits. Many policies treat these as separate events, leaving thousands of claims partially denied each year.

Why It Happens

• Homeowners rely on purchase-price estimates instead of rebuild values.
• Policies haven’t been updated to reflect post-COVID construction inflation.
• Items like sheds, fences, or solar panels are often left unlisted.
• Families forget to specify valuables exceeding per-item limits.

How myVal Helps Close the Gap

With the myVal Policy Health Check, users can:

• Choose an insurance policy for category limits and missing inclusions.
• Match listed assets against real-time rebuild data.
• Keeping a digital record of valuables to accelerate claims after disasters.
• Offering preventive maintenance reminders that reduce damage likelihood.

Underinsurance isn’t just a financial issue — it’s an emotional one. Ensuring full coverage means ensuring recovery is possible.

References

Insurance Council of Australia. (2025). Underinsurance in New South Wales: 2025 Flood and Storm Report.

Australian Financial Review. (2025, April 10). Why one-third of NSW homeowners remain underinsured.

Choice Australia. (2024, December). Flood vs storm cover explained.