Time will tell – understanding gradual damage

We’re often asked why some things are covered by insurance while others aren’t, like the water damage caused from a leaky tap. So we thought we’d explain it here with a few examples.

As you know, insurance is all about covering accidental or unforeseen damage or loss. For example you clip the gate as you reverse your car out the driveway, the wind hurls your trampoline into the living room window during a storm, or you drop your mobile phone. These things are covered by insurance because they weren’t meant to happen, they weren’t done on purpose, and you couldn’t have foreseen them occurring. 

There are other kinds of damage that you can avoid though, such as gradual damage or damage that happens over a period time, regardless of when you discover it. So, just because you’ve only just noticed that the shower floor has a hole in it, doesn’t mean it has just happened. These kinds of things generally take time to build up and offer a few clues that you shouldn’t ignore, such as a squidgy floor or the water bill going up. So, it’s important to remember that sometimes insurance doesn’t cover you if you continue to ignore the signs.

Let’s take the example of one customer who heard a dripping noise in the bathroom and thought it was the tap. She later discovered the source of the noise when someone pointed out that water was dripping from her ceiling. She pierced some holes in the ceiling to let it drain, but a substantial amount of water poured out, with more dripping to follow from the bulging ceiling. A leaking pipe/valve meant the water damage extended across the entire bathroom ceiling and was beginning to affect that of the adjoining toilet. A week earlier she had noticed that skirting around the ceiling was pulling away but hadn’t looked into it further.

In this instance, our customer was covered by AA Insurance’s Hidden Water Damage benefit, because the source of the problem was hidden from view in the ceiling, and the customer could not have discovered the damage immediately, because it wasn’t obvious until the water started dripping. However, ignoring the clue about the skirting board meant her ceiling had deteriorated substantially and required considerable work to repair her home’s only bathroom. 

If she was with an insurer who didn’t offer a gradual damage benefit, she may have had to pay for the entire repair out of her own pocket.  Alternatively, if the leaky pipe had been visible (such as the connection to a washing machine) but wasn’t fixed, causing the floorboards to gradually rot and break, then it’s unlikely to have been covered by most home and contents policies because it wouldn’t be considered unforeseen.  

But what if you’re not living in the home, because it’s a rental? Well, here’s just one example of how a simple pipe leak in a rental home caused gradual damage. The pipe behind the shower had a slow leak, and over time this water has sprayed on to the surrounding wall which backs on to an un-used cupboard. This has caused water damage to the wall and floor, which gradually deteriorated. The tenant had noticed a musty smell in the area, but was unable to work out why, and assumed it was just normal in the house, so they made sure to open windows in this area to air it out. The next time the landlord came over, they checked under the house and could see water staining and damage as a result of the leak. Fortunately our customer had comprehensive landlord insurance for their rental.

These examples illustrate the importance of, not only having the right cover, but also maintaining your home or investment property. Even though it’s part of the conditions of your insurance, keeping your property in good nick really does save you time and money in the long run. If you, your tenants or property manager, notice something is broken, a funny smell, the sound of a drip or something unusual like a stain on the ceiling or mould growing, get it sorted quickly before it’s too late.

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