Insurers have detailed data on your home’s flood risk. So, why don’t you?

Buying a house is one of the most high-stakes decisions many people will make in their lives. Yet many households are investing millions without an adequate understanding of a property’s exposure to growing climate risks.

In Australia, perhaps the starkest climate hazard is flood. Flooding ranks as one of the most financially damaging weather-related disasters, with costs rising sharply over the past five years.

So, how do you find out a given property’s flood risk? This information certainly exists. It is embedded in the insurance premiums we are charged.

But in Australia, unlike many comparable countries, this information is not readily available to all households. Changing that would help them make smarter, more informed decisions – and could benefit us all.

The growing threat of floods

Flooding is a growing problem for households across the nation, and forecast to grow as the climate changes. Yet, flood risk is not always easy to identify. It reflects the complex interplay of two key elements.

The first is topography, the layout of natural and built features on the land, such as hills, rivers, roads, and buildings. The second is hydrology, the way water sources including rainfall, rivers and groundwater are distributed and interact with the environment and human systems.

Efforts to create a unified flood risk map have been limited by fragmented data ownership, proprietary licensing and poor coordination.

Some detailed resources do exist. Queensland, for example, has developed a Property Level Flood Information Portal, currently available to 39 eligible local governments. It’s part of an opt-in program requiring councils to voluntarily participate.

Scaling this kind of initiative to a national level would require collaboration across hundreds of councils, each with varying priorities, resources and technical capacities.

Other public resources, such as the Australian Flood Risk Information Portal (AFRIP), provide metadata that can help identify where flood studies have been done, but do not offer consistent, property-level flood risk data.

Helpful insights, hidden

Australia does, however, have a National Flood Information Database (NFID). This estimates flood risk for approximately 14 million Australian homes and is used by insurers to assess and price flood risk.

It was constructed by the Insurance Council of Australia over many years, by integrating and harmonising much of the flood mapping undertaken by local and state governments in Australia.

Currently, this data is proprietary – meaning insurers who pay can access it to set premiums, but Australian households can’t due to commercial licensing and data ownership restrictions.

This sits awkwardly with the fact that much of National Flood Information Database is based on mapping and studies commissioned by local and state governments.

Lagging the world

Australia is an outlier among comparable countries in not having reliable public data on property-level flood risk. On this front, the Netherlands is widely considered to be the gold standard.

National flood maps are made accessible to households through a government website that allows households to view flood risk information tailored to individual addresses.

This includes information about possible flood depth, what to expect in a flood event and how to stay safe. Information is presented in plain language and with simple infographics.

Elsewhere around the world, the United States has long provided national flood maps in relation to its National Flood Insurance Program. There are also laws in many US states requiring flood risk disclosures when a property is sold.

One of the US’ largest real estate listing websites, Zillow, includes detailed information on an individual property’s exposure to the full range of climate hazards.

And in the United Kingdom, the government produces national maps of flood risk and makes them publicly available.

How we could benefit

In fighting climate change, we need to understand the flood risk to reduce exposure and vulnerability as much as possible.

One key federal government initiative is the Disaster Ready Fund. This supports a variety of programs, from investments in physical and social infrastructure to nature-based solutions and research.

While this holistic approach is important, a much more structured one is needed, especially around flood risk mitigation.

Providing Australians with greater transparency around a home’s flood risk would enable households to make more informed decisions about the properties they purchase or rent.

It would also limit insurance bill shock and better align households’ expectations with the reality of the climate risks they face.

Most importantly, it would provide a much-needed climate signal to property owners and may encourage many to undertake measures to reduce damage in the event of a flood.

More informed discussions

Having reliable and consistent publicly shared flood data information will also support community discussions on what is an acceptable level of risk and guide decisions on where and how to mitigate or relocate.

Making the data we already have on property-level flood risk available for general consumption is a no-brainer. But it is the thin end of the wedge. We also need better data to begin with.

In many areas, the current flood maps are outdated. This introduces additional uncertainty, which is priced into insurance premiums.

This problem calls on Australia to raise the bar, improving the quality and updating the frequency of flood mapping to better inform decisions and debate.

The taxpayer spending required to do this is hard to justify if this data remains locked up within the insurance industry – but it makes more sense if there are wider public benefits, such as for households.