When it comes to insurance claims, especially those for accidental damage under a traditional building or nowadays, mostly building all-risk type policies, a common and problematic phrase we see far too often is: “We don’t know what happened.”
On the surface, this may seem like an honest or harmless statement. But from an insurance perspective, it raises immediate red flags and can result in a declined claim.
What is accidental damage, in realty?
Accidental damage cover is designed to protect property owners against sudden, unforeseen, and unintended physical damage, the kind caused by a specific, identifiable incident. Under the traditional material damage or defined event policies, it was prudent to include accidental damage sections or clauses, to ensure that clients had wider cover to include other accidental occurrences, not otherwise defined.
Examples might include:
- Falling in the shower, causing glass and aluminium panels to collapse and cause more damage.
- A frying pan dropped on a glass stovetop, cracking it.
- A heavy object falling onto a basin or toilet cistern, breaking it.
The key thread in all these examples?
A known event that caused the damage, something that happened unexpectedly but can be described.
Why “unknown cause” is a problem
When claimants say, “we don’t know what happened”, the insurer is left with no grounds to assess:
- Whether the incident was sudden or gradual
- Whether the damage arose from an excluded cause, such as wear and tear, poor workmanship, maintenance issues, or design defects
- Whether the event was even accidental at all
Without this vital information, the insurer cannot confidently apply the accidental damage extension, by definition or not apply an exclusion in the case of an excluded item. The claims manager needs to check that nothing in terms of the claim falls outside of policy cover.
Even all-risk cover has boundaries.
While an “All Risk” or wide cover policy sounds comprehensive, it still requires the cause of loss to be both sudden and unexpected, and the damage to be physical and unintended.
More importantly, these policies still contain specific exclusions such as:
- Gradual deterioration
- Mechanical or electrical breakdown
- Faulty design or construction
- Defective workmanship
- Wear and tear
If no cause is provided, the insurer cannot rule these exclusions out and is more likely to decline the claim.
Best practice for trustees and managing agents
Always verify damage before submitting a claim. It can be tricky, but better oversight has proven to reduce unwarranted claims, i.e. those which are wear and tear related.
Ask the occupants or anyone who may have witnessed the event.
Ask the right questions: Was anything dropped? Did anyone bump or knock the item? Were any contractors working in the area?
Avoid vague descriptions like “unknown” or “we just noticed it” as these create uncertainty and can lead to rejection.
If unsure, still give context: For example, “The unit was unoccupied for the weekend. The owner returned to find the hob cracked. We suspect something may have fallen on it, as there was a broken, damaged pot lying alongside, but no one was present.”
In summary
While it may be tempting to submit a claim and hope for the best, insurers need clarity, especially with accidental damage.
The more detail and certainty you provide, the stronger your claim will be. It also speeds up the process, avoiding ambiguous claims, only to be referred to claim management at the insurance company and then going through an avoidable claim rejection process.
In short, accidental damage is not a mystery – it still needs a cause.
Author: Mike Addison
Addsure is a leading sectional title insurance broker. Get fit and proper advice from advisors who understand sectional title.