Named Perils Insurance Policy: 2026 Guide for Australians

Unlike comprehensive or “all risks” policies that cover any loss unless specifically excluded, a named perils policy covers only those events that are explicitly listed in your contract. Common named perils include fire, theft, lightning, storm damage, and sometimes malicious damage. If it’s not named, it’s not covered.

In 2026, Australian insurers are making their named perils policies clearer and more customisable. Following ASIC’s product design and distribution obligations, policies now often feature:

• Transparent lists of covered events

• Plain English explanations

• Optional add-ons for climate-related perils (like bushfire or flood)

For example, if your policy lists fire, burglary, and storm, but not flood, you’re not covered for any flood damage—no matter the circumstances. This specificity makes named perils policies generally more affordable, but also more restrictive, than broad-form coverage.

With insurance premiums climbing in response to the increasing frequency of extreme weather events, many Australians are seeking ways to tailor their cover and manage costs. Named perils insurance is seeing renewed interest for several reasons:

• Premium Relief: With average home and contents insurance premiums rising by up to 18% in some states in early 2026, named perils policies are providing a cost-effective alternative by excluding less-likely risks.

• Climate-Specific Add-Ons: New options allow policyholders to add or remove coverage for natural disasters such as bushfires, hailstorms, and floods, in line with personal risk assessments and updated climate zone maps.

• Regulatory Push for Transparency: The General Insurance Code of Practice update in March 2026 requires clearer policy summaries, helping consumers better understand what’s included—and what’s not.

Consider the case of a Sydney homeowner in a low flood-risk suburb: opting for a named perils policy that covers fire, theft, and storm (but not flood) can trim annual costs by hundreds of dollars compared to an all-perils policy.

Choosing between a named perils policy and an all-risks policy isn’t just about price—it’s about risk appetite and personal circumstances.

• Named Perils: Best suited for those who have assessed their exposure and want to manage premiums. It’s ideal if you live in a low-risk area or have taken other mitigation steps (such as flood barriers or security systems).

• All Risks: Covers everything except what’s specifically excluded. It’s the safer (and pricier) bet for those in unpredictable environments or who want maximum peace of mind.

In 2026, more insurers are offering modular policies—letting you start with a named perils base and add cover for specific threats as needed. This flexibility helps Australians avoid paying for cover they don’t need, while still protecting against the perils that matter most.

During the heavy rains in Queensland’s 2026 wet season, thousands of claims were denied because flood wasn’t a named peril on many budget policies. Meanwhile, policyholders who had added flood as an extra (often for as little as $80 per year) were able to claim significant repairs. This year’s events have sparked renewed interest in reviewing and customising insurance cover—especially for those in flood-prone regions.

To get the best value and protection from a named perils insurance policy in 2026:

• Carefully review the policy schedule and ask your insurer to clarify any ambiguous terms.

• Assess your real risks using updated local hazard maps and climate data.

• Consider optional extras for emerging risks (e.g., cyber theft for business policies or bushfire for rural homes).

• Revisit your cover annually—especially after major life changes or property upgrades.

Named perils insurance policies in 2026 are more customisable, transparent, and competitively priced than ever before. As climate change and regulatory reforms reshape the insurance landscape, taking the time to understand your policy and tailor it to your true needs has never been more important.