How to make sure your storm-related homeowner's claim won't be rejected

If you’ve been a bit slack about maintaining your home lately, your homeowner's insurance policy won’t help you if the rainy season wreaks havoc on your property.

That’s because what you regard as a valid water damage claim may not match the opinion of your insurer.

“The water damage must be sudden and unforeseen, not gradual or over time or involve wear and tear,” the ombudsman for short-term insurance (OSTI) warned consumers this week. 

“There must be actual damage, which means one cannot claim for carpets or clothing that have become wet, unless the wetness resulted in damage, including change in appearance or unsightly marks or a bad odour, for example,” the ombud’s office said.

“One can also not claim for mould, because it occurs over time.”

Here are a few other reasons insurers reject water damage-related claims:

• defective design or workmanship;
• lack of maintenance; or
• the homeowner doing a quick fix-it job before the insurance assessor has validated the claim.

“Should it be necessary to conduct urgent or emergency repairs, proper records or proof must be maintained for validation purposes,” the OSTI warns. “If the loss or damage cannot be validated, the claim may be declined.”

The office shared a case study, typical of thousands of claims rejected on the grounds of lack of maintenance.

Mrs M submitted a claim to the insurer for storm-related damage to her insured property, which was rejected due to lack of maintenance.

So she lodged a complaint with the OSTI, saying the property was damaged due to a storm and heavy rains, and the roof was leaking.

But the insurance assessor found the asbestos roof coverings were not maintained, allowing water to penetrate the unpainted roof sheeting. Had the roof been maintained, it would not have leaked, the insurer said.

“While Mrs M did not dispute that the roof was not maintained, she argued that the family had moved into the property just eight months before the claim was submitted, hence she should not be held responsible for the unmaintained condition of the roof,” the OSTI said.

The insurer should have assessed the property and noted any defects before proceeding to collect premiums, insisted Mrs M.

The OSTI sided with the insurer on this one, because Mrs M admitted the home had not been maintained and the unmaintained roof was material to the loss.

This case has crucial warnings for those who have homeowner's insurance, also referred to as building insurance — that’s everyone who has a home loan:

• About Mrs M’s contention that the insurer should have had the property assessed and identified the roof issues before activating her policy, OSTI said: “This is irrelevant as the policy clearly states that no cover will be provided where there is lack of maintenance.

“The terms of the policy governing the contractual relationship between the insurer and Mrs M do not require the insurer to assess the property before placing it on cover. It is the insured’s responsibility to ensure the property is regularly maintained.

“The mere fact that a policyholder pays a premium does not necessarily mean that all claims submitted will be accepted. Even if an insured event, such as a storm or rain, did occur and caused water damage to the insured property, in certain instances, similar to Mrs M’s case, an insurer may justly repudiate such a claim.”

• The “inspector” sent by the bank to your home when you apply for finance has nothing to do with homeowner's insurance requirements. He or she is there purely to establish whether the property offers sufficient security to the bank in terms of the home loan agreement, and therefore is no guarantee that the property is free of defects. 

You, the client, are responsible for ensuring the building meets all structural codes, that the cover amount is adequate and for maintaining the property.

• Before submitting an offer to buy a home, get it professionally assessed by an inspection company to ensure it meets all of the structural requirements.

• Before the rainy season, clear gutters and downpipes of any debris, leaves and other material that may have clogged them during the winter months. And have your roof professionally inspected to ensure there are no structural issues which could result in a storm damage claim being rejected.

• GET IN TOUCH: You can contact Wendy Knowler for advice with your consumer issues via e-mail: consumer@knowler.co.za or on Twitter: @wendyknowler.

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