Home insurance does not cover everything

The complainant had submitted an insurance claim for damage to his boundary wall, which he said had collapsed after extreme weather. However, an insurance assessment showed that the damage was old, the wall had been leaning over for some time, and there were no signs of storm damage to the wall. The conclusion was that the legally sufficient case of the damage was wear and tear and gradual deterioration.

At that point, the complainant pointed out that he had informed the insurer about the cracks on the wall before the inception of the policy and the insurer accepted the policy without inspecting the property.

He submitted photographs from Google Street View and photographs from the insurance assessor. On closer examination of the two sets of photos, the National Financial Ombud Scheme SA (NFO) noted that the cracks had become more extensive over time. The NFO was of the view that on a balance of probabilities it was not possible that the cracks were the result of a single, sudden and unforeseen event.

Most importantly, the fact that the homeowner had told the insurer about the cracks upfront did not mean that he was absolved of his responsibility to maintain the property by repairing the cracks.

Insurance is not a cover-all solution

Mamiki Khunou, adjudicator in the non-life insurance division of the NFO office, noted the importance of understanding that the purpose of an insurance policy is not to offer unconditional cover for any and every loss.

The purpose of a short-term insurance policy is to provide cover for damage caused by a single, sudden, and unforeseen event.

“An insurance policy is issued subject to terms and conditions which are set out in the policy documents. Although there is an obligation on insurers to provide policyholders at sales stage with concise information about the policy, there is also an obligation on policyholders to familiarise themselves with the terms and conditions of their policies,” she said.

Wynand van Vuuren, client experience partner at King Price Insurance, says if you’ve got buildings or home contents insurance, you may think you’re covered no matter what, but not all water-related damage is claimable.

Insurance generally covers sudden, accidental and natural events like burst pipes and storm damage.

“However, gradual damage caused by wear and tear or poor maintenance is usually excluded, as is accidental damage that’s caused by ‘user error’, like leaving a tap open overnight,” he warns.

While you can’t control the weather, routine maintenance really matters. This means checking your roof for loose tiles, clearing your gutters regularly, and inspecting appliances for leaks. And, as the complainant in this article found out, it means repairing cracks in the wall when you identify them.

You should also turn your geyser off during power and water outages, says Van Vuuren.

“Burst geysers are a common cause of water-related claims. Switching them off is a small step that can prevent big problems.” He also recommends looking into smart home tech like water sensors or leak detectors, which can alert you early to a problem.

Regular maintenance is vital

Ryno de Kock, head of distribution at PSG Insure, adds that regular maintenance is not only an effective way to prevent unnecessary claims, it is also necessary to ensure that the policy conditions are met.

“Most insurers include in the policy condition that policyholders need to take all responsible steps and precautions to prevent accidents or losses,” he says.

De Kock cautions that every policy will include terms and conditions that the insured needs to meet in order for a claim to be valid. These terms will differ from policy to policy and will depend on several factors including your risk profile, your home’s geographical location, the replacement value of what is insured and the level of cover you have.

“For example, depending on the risk factors involved, insurers (and their underwriters) may propose more stringent underwriting criteria, for areas where claims are more predominant for theft of fixtures and fittings. The underwriting criteria may include that additional security measures are installed at the premises. In these cases, it is the responsibility of the homeowner to ensure compliance with the terms and conditions to ensure that claims can be settled,” he cautioned. DM