Understanding flood risk in strata buildings: insights from the insurance world
For many Australian body corporates, flooding is no longer a hypothetical risk. Basement inundation, damaged services, access issues and rising insurance costs are becoming familiar — even in buildings that have never experienced a “major” flood.
A recent presentation by Lochton, Understanding Flood Risk in Australia, offered a rare inside view from flood insurers and underwriters. The message was confronting, but highly relevant for strata committees.
The short version is this:
Flood risk is becoming harder to insure, harder to predict, and harder to manage — especially at the building scale.
Why flood risk feels so confusing for body corporates
From a strata perspective, flood risk often feels contradictory:
your building may be mapped as “high risk” but has never flooded
or it may flood repeatedly despite appearing well outside flood zones
insurers raise premiums or excesses without clear explanation
engineers and modellers don’t always agree
owners expect certainty that simply doesn’t exist
The Lochton presentation made clear that this confusion is not accidental — it reflects the nature of flood risk itself.
Flood is one of the most localised and unpredictable risks in Australia.
Two neighbouring buildings can experience completely different outcomes from the same rainfall event due to:
small elevation differences
drainage and maintenance issues
basement layouts and service locations
access routes flooding before buildings do
For body corporates, this means flood maps and return periods rarely tell the whole story.
Why insurers struggle with flood — and why that matters to strata
One of the most important insights from the presentation came from flood underwriting experience.
Even with sophisticated models, flood insurance portfolios are extremely difficult to make profitable.
This is because:
losses are highly correlated during major rain events
a small number of buildings often flood repeatedly
damage is driven by duration, clean-up and downtime — not just water depth
business interruption and loss of use can exceed repair costs
For body corporates, this explains several familiar trends:
rising flood premiums
higher flood excesses
restricted coverage for basements and services
slower, more contested claims processes
The key implication is simple:
Insurance alone is not a flood management strategy.
Flood risk that looks “insured” on paper can still turn into a financial and governance crisis for a body corporate.
Why small, frequent floods matter more than disasters
Strata committees often focus on rare, catastrophic floods — the “1-in-100 year” event.
But from an insurance and cost perspective, it is often smaller, repeated floods that cause the most damage over time:
frequent basement water ingress
repeated damage to lifts, switchboards and pumps
mould, corrosion and asset deterioration
ongoing premium increases after each claim
These events rarely make headlines, but they steadily erode:
sinking funds
insurability
owner confidence
committee goodwill
Flood risk is really about what fails first
For most strata buildings, flood damage is not uniform.
The critical questions are:
when does water first enter the building?
which systems are affected first?
what prevents residents accessing or occupying the building?
what delays clean-up and reinstatement?
In many cases, modest water depths cause major disruption because:
electrical rooms sit below ground
basements have poor drainage or backflow protection
access roads flood before buildings do
responsibility for action during events is unclear
Understanding these failure pathways is far more useful than debating flood probabilities.
Resilience for body corporates means faster recovery
The Lochton presentation also highlighted a shift in how flood resilience is being approached — including in insurance markets.
Because:
losses are uncertain
claims take time
recovery costs escalate quickly
Greater emphasis is being placed on:
speed of recovery
access to funds immediately after events
operational preparedness
proportionate, staged mitigation measures
For body corporates, resilience is not about eliminating flood risk — it is about:
reducing repeated damage
limiting disruption
restoring the building quickly
avoiding emergency levies and disputes
What good flood decision-making looks like for strata
Body corporate committees are not expected to eliminate all risk.
They are expected to make decisions that are:
reasonable
proportionate
evidence-based
defensible over time
This means:
accepting uncertainty rather than chasing false precision
focusing on consequences, not just probabilities
prioritising actions that materially reduce disruption
documenting decisions clearly for owners and insurers
Good flood management is not about perfection — it’s about making decisions you can stand behind.
The Strabo Rivers approach to strata flood risk
At Strabo Rivers, we work with body corporates to move from:
confusion → clarity
reaction → prioritisation
fear → defensible action
We do not replace flood engineers or insurers.
Our role is to help strata committees:
understand what flood risk actually means for their building
identify the few actions that matter most
align physical, operational and financial responses
make decisions that hold up under uncertainty
Flood risk in Australia is getting harder — but better, calmer decisions are still possible.
If your building has experienced flooding, rising insurance costs, or growing uncertainty about flood risk, Strabo Rivers can help you clarify what matters and what to do next. Contact Sebastian - sebastian@straborivers.com or +61 407 700 443