Firstly, it is critical that the client disclose anything they know about the risk that may influence the insurer in their decision to accept the risk. This will also influence the premium and terms and conditions.
The insurer has the right to survey the risk but in doing so it will unlikely include a roof inspection. Based on their experience, they will highlight any roof-related issues since the claim description will reveal this.
At this point, the insurer can consider the situation and decide how to proceed. The risk may be declined if numerous water-related claims were attributed to the roof.
Nevertheless, assuming that the insurer has accepted the risk in good faith, what are his options in the event of a claim?
When reviewing a claim, the insurer has to consider the following:
- Is the event result from an insured peril?
- Is the damage of a gradual nature?
- Is there evidence of pre-existing water damage to ceilings that the trustees may have been unaware off because the occupant did not advise the trustees of the problem?
- Did the client disclose all he could reasonably know about the condition of the roof?
- The commitment to treat customers fairly must be considered when evaluating a claim.
Likely outcomes:
- If there is evidence of gradual damage i.e., happening over a period of time, the insurer will likely decline the claim. This is usually evidenced by water marks on ceilings and walls or mould in cupboards.
- If the damage is sudden and unforeseen, the assessor, acting on the insurer’s instructions, may inspect the roof for defects, loose roof tiles, or failed under-tile waterproofing. The insurer may take a view on the matter, allowing for his obligation to treat customers fairly. In this scenario, the critical question to be asked is whether the client could have reasonably known about such defects.
- It is likely that the insurer will pay the first claim but reject future losses unless the roof defect has been fixed. Following this, the insurer may place terms on the policy to that effect.
Author: Ian Barton
Addsure is grateful to Ian Barton, an experienced and respected underwriting manager who consults for Addsure and who has written this short article for us.
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