Areas threatened by a natural disaster such as a bush fire or flood, will have embargoes placed upon them by insurance companies. This means that if you want to increase your existing insurance or place cover on an uninsured property, the increase or the new cover will not be effective until the end of the embargo period.

Depending on the severity of the threat, the embargo may be for a period as short as 36 hours, although due to the unpredictable nature of these events some may be longer.  Areas likely to be repeatedly affected, may have a permanent embargo placed on them following a major disaster.  This means that if you don’t have cover, you may never be able to get it.
The purpose of this is to prevent people who don’t normally insure their property from taking out cover only when their property becomes threatened.  If an embargo is in place no cover will be available and if their home is destroyed the loss must be met by the uninsured owner.

Embargoes are usually based on a post code area or a general regional area.  This could mean in large districts, the fire or flood may not be in your immediate vicinity but an embargo could prevent you from taking out insurance when you need it most.

The simple test for the need for insurance is, “If you can’t afford the cost of replacing an asset – insure it!”  Don’t fail to insure your valuables adequately at all times because if threatened by a disaster, you may find yourself with no house and no insurance money to replace it.