Under this new scheme, individuals residing in regions marked as either moderate or low risk, who have previously not elected flood coverage, will henceforth have it included as part of their standard package. Allianz projects a marginal rise in premiums due to this update. They estimate that policyholders in low-risk zones could expect an increase of under $20 annually pre-tax, while those in moderate-risk areas may see a less than $100 addition to their yearly premiums before taxes.

The insurance company has expressed its aim through this move to instill greater assurance among policyholders concerning flood protection, covering both scenarios of excessive rainwater accumulation and riverine floods. For homeowners located in areas recognized as high-risk and without existing flood coverage, the current policy will remain unchanged due to potentially steep premium costs that could undermine their capability to maintain home insurance.

Allianz has also proposed alterations in flood exclusions, which will cover rainwater run-off alongside the traditional flood coverage, eliminating the prerequisite for hydrology reports. This is expected not only to trim down assessment times in case of claims but also to resolve some confusion regarding the extent of coverage during flood events.

The insurer's reflection on the viability of optional flood coverage, a topic of concern since last autumn, triggered this overhaul. By cutting out optional coverage, Allianz plans to outrun the excessive delays and misunderstandings that arose from sorting out coverages during past floods, particularly when distinguishing between riverine flooding and rainwater build-up.

Industry counterparts like IAG's NRMA Insurance and the RACV in Victoria offer ground-up water damage protection—accounting for flooding, rainwater, and storm surges—for home products in specific locations, with some exceptions for customer opt-outs. On the contrary, Suncorp maintains flood coverage as a compulsory feature in its home insurance suite, with the possibility for high-risk AAMI customers to withdraw from it.

This revised approach by Allianz, which unfortunately required over a thousand hydrology analyses post the 2022 floods, is expected to enhance policy clarity and accelerate the claims process. As insurance companies continue adapting their strategies post-catastrophe, suitable disaster responses remain a crucial focus for the industry.