Please explain: how should shower leaks be dealt with under insurance

Annemos

Good afternoon

I have just seen a review about an insurance claim. 

There is so much confusion amongst about just what should be paid for. I don't follow it either. 


Suppose that the shower tray caused a leak. And that water then damaged the ceiling below etc. 


The Poster is implying that the Insurance would only cover the decorating but not the damage of the Shower tray. 

I suppose the Shower tray could have caused the leak if it cracked or if the sealant failed. 


- So wear and tear is going to be an issue. 

- But if the shower tray issue is not dealt with, then there is no point doing the decorating.

- Also what if the homeowner did not report it straight away, them you could have the "gradual damage" exclusion. 
 

Just how do Claims Handlers and Insurance Companies deal with such claims in practice? 

Thanks in advance. 

tacpot12

They can only deal with the facts as they are presented to them, and in line with what the policy actually covers. 

There are policies that cover damage to the property itself, and policies that cover damage to items within the property. There are policies that cover accidental damage and policies that cover damages from other causes, such as leaks. Most policies exclude damage arising from wear and tear, but may cover it if the wear and tear could not be observed.  e.g. If you have a hole in your roof that you can see, and you do nothing to repair, it they will not cover the cost of repairs if water get in, and neither will they cover the cost of repairing the roof, as Building Insurance is not designed to repair wear and tear to the roof, but rather to cover damage from events such as storm damage, and lightning strikes - i.e. things that may never happen, as opposed to wear and tear which will always result in the roof failing at some point in the future.  

In the example you give, the policy holder may be covered for damage to the ceiling arising from leaks, but the contents of the property may not be covered. (You might consider the 'contents' to be what would fall out of the house/flat if you were able to tip it upside down!) The damage to the shower tray may be covered if the shower tray was damaged by an accident, e.g. someone slipping and falling while using the shower. If they were knocked unconcious, this might explain why the water was allowed to run for so long as to cause damage to the ceiling.

So they are looking at cause and effect:

If the shower tray was damaged by someone dropping a hammer on it, that is accidental damage. The damage should have been observable and the shower not used until it was replaced. They would not pay for the damage to the shower tray unless the cover included Accidental Damage, and the would certainly not pay for damage caused from using the shower if the tray was clearly broken, but the homeowner would have a claim against the person who used a shower in this way (because they would have been negligent). 
 
If the shower tray leaked because the sealant failed, then this is unlikely to have been observable, and the damage caused to the ceiling would be covered, but the failed sealant would not be covered in as much as the insurer would not pay to have the sealant renewed. This cost would fall to the homeowner - if they did not get the sealant renewed, knowing that it had failed, their insurer would not pay for the  ceiling to be  repaired again, as the homeone owner would negligent. 

They are also looking at whether the issue was dealt with promptly. If you see water coming through your ceiling, you need to sort the issue out asap. Your insurance will only pay for the cost of issues you deal with promptly. If you don't, they won't cover you due to the 'gradual damage' exclusion.

Annemos

Thank you so much tacpot12 for such a detailed explanation.

Cause and Effect is a good way of describing how the claims are tackled by dissecting them. Thanks for that. 


If they decide that the actual repair itself is not covered, would the Claims Handler ever liaise with the homeowner, to get the shower fixed, with a payment then coming from the homeowner to that contractor? 

Or would the homeowner typically be left totally alone to get the repair done first. And then the homeowner should call back the claims handler afterwards to get the decorating done under the insurance? 

Or is that just impossible to say, as all the facts of the cases are different (and the insurance policies). 


It makes one realise that the Claims Handler needs to be quite detailed in their explanations of how the claim was handled, or the homeowner might end up feeling very aggrieved! I think this could particularly be the case if it only takes place on the telephone. 

Sandtree

Similar to what has already been explained, the stated story is considered against the terms and conditions of the policy. 

For this type of scenario there are key typical exclusions to consider:

• Wear and tear or defective workmanship
• Slowly acting causes

Also have to remember that every home insurance policy will have a requirement that you maintain your property.

So if the caller says theres been a yellow stain on their ceiling thats gradually got bigger and last night the whole ceiling came down with stagnant water. They went up stairs and notice the sealant around the shower tray has degraded over time and the water must have been slowly getting around it. The claims advisor would almost certainly repudiate the claim.

If the person said instead they were in the shower having some champagne to celebrate something and dropped the bottle, it broke the shower tray, they turned the water off striaght away but there is signs of water damage in the ceiling below then the claims handler will check the policy has Accidental Damage and if it does arrange someone to inspect (subject to estimated claim cost and how busy they are). An inspection will look at the damage and double check the water has only just gotten into the ceiling space... if the floor boards are rotten or lots of evidence of previous leaks then it may be investigated if the claimant has faked the accidental damage to hide the slowly acting issue of an unfixed leak.

Escape of Water from a pipe is slightly different and in that case the repair to the pipe isnt covered but the resultant damage from the water escape is. Here you need to fix the pipe first before the insurer deals with the damage (unless you have trace and access cover and you dont know where the leak is coming from). Depending on the extent of the damage they may want to see it first or may ask for you to contact them once the leak is fixed. They generally will want to see the invoice for the repair to ensure its been done.

tacpot12

My experience is that the insurance companies much prefer to pay out cash to the home owner, and let the home owner find the relevant tradesperson and contract with them to effect a repair. The insurers don't really want to be responsible for the repair and any subsequent warranty issues. 

There are some home protection-type policies that will provide a plumber/electrician/roofer to do any repairs that are necessary, but such policies also tend to cover items that are subject to wear and tear. They are quite different from the Buildings and Contents insurance that most people will have. 

Sandtree

tacpot12 said:

My experience is that the insurance companies much prefer to pay out cash to the home owner, and let the home owner find the relevant tradesperson and contract with them to effect a repair. The insurers don't really want to be responsible for the repair and any subsequent warranty issues.

Corporate discounts and warranties from the repairers make up for that... its more the practicalities that painter decoraters, tilers etc tend to be very small companies/sole traders and so maintaining a national network is a mountain of work. Similarly most dont use an electronic booking system so engaging them is challenging whereas when I did some work for a warranty company they could directly book the slot with the local engineer, with garages they have sufficient capacity and flow to meet our 3 day SLA and could turn themselves off in the system. 

Annemos

Thanks Sandtree and tacpot12

One last question. If the "gradually operating" clause applies for the cause of any  leak   or if the "wear and tear" clause applies for the cause of any leak,

does that usually mean the whole claim is repudiated. (No effect will ever be considered.)


So the Claims Handler would look at the Cause first to see if the claim is a non-starter. Then if that is the case, they don't even need to look at any of the damage effects that were caused by the leak. 

Have I got that correct? That makes sense then. And it simplifies life for the Claim Handler, too. 

Sandtree

It will depend on how the policy is constructed, so if you look at Direct Line's the exclusion is in the general section so its cover is broad but is explicitly stated not to impact the Trace & Access cover where gradual impact is on a single pipe, joint etc. Axa on the other hand have a gradual clause in individual sections (eg Fire, Smoke, Lightening and Earthquake section excludes "Smoke damage caused by smog, agricultural or industrial operations or smoke damage that happens gradually from repeated exposure"

What a claims advisor does -v- what their system does will vary significantly between insurers... some are on little more than green screen systems still and so the validation is done by the advisor. Others have systemised decision making a lot more and so through selection of options it'll trigger further scripts and/or actions. So in my claims days (motor) first question was if it was a fire, theft or accident... that drove all the rest of the questions. If it was accident was a third party involved... if answer was yes it then asked for circumstances and the advisor had a free text box to enter the details but also 8 basic options (or 7 + other), depending on which they chose and if an injury was noted or not would dictate if the file was routed to Recoveries, Disputed Liability, Injury, Third Party or not assigned to any technical team. 

If a claim hits a general exclusion, eg you let your 15 year old son try to drive the car into the garage and he hits the wall, then the whole claim will be repudiated and the insured will have to cover their own losses. At other times parts of claims are declined rather than the whole claim (eg window smashed and £3,000 handbag snatched from the passenger seat when parked and unattended - window is covered handbag is repudiated as will fall foul of clauses on it being visible/due care.)

Annemos

It is a complicated business, the Insurance Industry! 

Thanks again everybody for your explanations. 

tacpot12

Annemos said:

It is a complicated business, the Insurance Industry! 
....

It really is, and it is another of those financial subjects that doesn't get explained well at school. Young people tend to be very unware of what you can and should insure, and how the common forms of insurance work. 

Everyone should also be aware of the concept of "self-insurance", and of the nature of policy excesses (or 'deductibles' as our American cousins call them).  I have always sought to insure myself for the events that I cannot afford to cover from my own savings, e.g. loss of income, loss of my home, my liability to others, and have always selected quite high excesses on the basis that I can afford the loss of my home to cost me £1000, but not a lot more than that. These high excesses mean that I can get the cover for events that would otherwise cripple me at cost effective rates.   

Sandtree

tacpot12 said:
Everyone should also be aware of the concept of "self-insurance"  

And the difference between "self-insurance" and uninsured

Annemos said:

It is a complicated business, the Insurance Industry! 

And this is just the relatively simple matter of consumer insurance and their claims... havent touched on reinsurance, capital modelling or any of the other fun bits.