Water-related disasters have caused increasing losses in recent years. Efficient risk reduction policies require accurate assessment approaches, with careful consideration of costs, beyond material damages, which are commonly used in practice. Faced with possible risk reduction scenarios, limited financial resources require an improvement in the quality of cost estimation, thereby contributing to an efficient allocation of resources. This paper reviews the concept of total cost in the context of water-related disasters, elaborating on the typical direct/indirect and tangible/intangible cost categories. These categories are defined and explained, supported by a comprehensive assessment of economic valuation methods. Based on this information, practice relevant suggestions are made concerning the most appropriate methods for different cases in terms of scale, availability of data and of technical resources.