Water damages comes with the territory when you own property. It can arise in many different ways and in sectional title, it can be mitigated as far as possible by the owner (in the case of the section) and by the body corporate (where common property is concerned). For example, an owner can look out for leaking toilet pipes, sealants around baths and showers and keep waste pipes clear.
Bodies corporate should keep waterproofing, roofs, gutters, etc. in good order, coupled with regular checks. As the buildings age, the incidents of leaking pipes will become more prevalent. Nobody can be expected to maintain pipes that are embedded in walls but the responsibility for these items will default to the owner in respect of section damage, and the body corporate in respect of common area items that are damaged.
Not all insurance policy wordings are the same. Some insurers offer limited extra coverage but most exclude any damages resulting from wear or tear or of a gradual nature. For that reason, each scenario must be evaluated on its own merits where each scheme’s policy wording is read in conjunction with the policy schedule which may point to added conditions or restrictions.
A generalised summary of the way damages and coverage are dealt with by the three main insurers we work with are: Damage will either be covered by insurance (certain sudden and unforeseen events, not wear and tear related) or not be covered by insurance (damages caused by gradual wear and tear, defective design, or defective workmanship).
The definition of damages in benchmark policy wording means physical loss or damage caused by a single, sudden, unintentional, and unexpected event, which occurs at an identifiable time.
What constitutes a claimable event?
Firstly, it must be sudden and unforeseen, meaning that it happened at a certain time on a specific day. Secondly, it cannot be wear-and tear-related.
In exceptional cases, damages resulting from wear and tear will be covered but it must be proven to be sudden and unforeseen, i.e., not occurring over time. One example is worn waterproofing over a dry period which results in the flooding of a section upon first rains. The repair of the worn-out waterproofing is not covered but sudden resulting damages would be covered by most insurers.
There should be physical damage, not just soiled, dirty or contaminated, e.g., flooring, cupboards, carpets, or ceiling damaged resulting from the flow of water. Mould implies that the damage occurred over time unless it is only just appearing.
The cause of the damage cannot be due to defective design or workmanship, e.g., a section gets flooded because a recently laid paved area slopes towards the door and flooded the section upon first rains.
The damages can only be repaired once the cause has been determined. The insurer will need proof that the proximate cause has been removed.
Typical water damage claims include the following:
- Storm damage to the roof resulting in water damage to a section.
- Flooding after heavy downpour where water entered a section.
- Blocked drain on the balcony causes flooding of a section during heavy downpour.
- Washing machine inlet disconnects which causes flooding.
- Burst geyser caused damages.
- Burst pipe (under pressure) causing flooding or damage.
- Failed waterproofing causes water leaks after first rains.
- Overflowing bath causes flooding to section and damage to the section below.
The following examples illustrate when an event is claimable and when it is not.
Water coming through the roof:
Claimable event: The tiles on the roof were cracked and upon first rains on a specific day, water poured in. The water streamed down the wall, damaging ceilings, and built-in cupboards. It was reported immediately to body corporate for a claim. It was sudden and unforeseen; therefore, constituting a legitimate claim.
Not a claim: The tiles were cracked and over the past three to six months, water penetrated the tiles, causing dampness in the section. This has resulted in a build-up of moisture and mould, causing damage to the ceiling. Here, damage occurred over a period of time which means it is not a legitimate claim.
Bath or shower upstairs causing damage to section below:
Claim (possible): If the ingress is sudden and damage to the ceiling below is shown to be new or sudden, there could be grounds for a claim. This should be reported immediately to avoid claim rejection. A bath or washing machine that suddenly overflows, causing damage to the section below, will constitute a claim if it is reported and dealt with immediately.
Not a claim: If a leak over time caused ongoing damp, mould and paint peeling off it will not constitute grounds for a claim.
Burst pipe with resulting damage
Claim: After the claim is proven, the insurer should pay for the entire repair including the damaged pipe and any necessary repair work, such as retiling or replacing carpets, etc.
Deteriorated pipe, causing slow leak and damp over time
Not a claim: As there was no sudden water damage, the loss was caused by deterioration. Gradual deterioration and wear and tear are usually excluded.
Deteriorated pipe, with sudden collapse
In this case, there was a sudden appearance of water, running water, pool of water or flow of water. Normally, the insurer will only pay for the resulting water damage, e.g., the ceiling in flat below that was suddenly damaged. The location of the leak, along with the repair and retile, will determine who will be liable for the associated costs. If the event happened on common property, the body corporate’s account will be responsible for the repair costs.
Water-related damaged which are typically not covered:
- Water penetration over time caused by failing waterproofing.
- Failed or worn waterproofing itself.
- Water damage occurring when it rains due to a leaking balcony from the unit above.
- Damage to ceilings over time due to leaks in the bath trap or shower in the unit above.
- Damage to pipes where the pipes are old, rusty, leaking or have pinholes (corrosion).
- Leaking pipes not resulting from bursting, e.g., waste or drainpipes (not under pressure).
- Cracks appearing in tiles and walls unrelated to any specific claimable event.
- Damp.
- Seeping water, dampness, or mould as a result of a leaking pipe or a pipe with pinholes.
- Rain damage due to a windowsill is not waterproofed properly.
- Damage resulting from poor workmanship.
All water damages claims should be submitted with the following documents:
- A damages report indicating the cause which can be included by the contractor on an invoice or quote.
- Quotations for the repair from reputable suppliers or contractors with the scope and quantities clearly indicated.
- Photographs of the damages.
- A properly completed claim form.
- Any other information that may be helpful.
The more information provided at claim submission, the faster the claim will be settled. If all the information is submitted upfront, it is less likely that there will be queries and delays.
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Author: Mike Addison
Addsure is a leading sectional title insurance broker. Get fit and proper advice from advisors who understand sectional title.