By Herman Liebenberg – General Manager: Insure City Insurance Brokers (Pty) Ltd

“How is it possible that an insurer can expect me/us to know the condition of the pipe inside the walls?”

This is a question that has come up most during my time in the insurance industry when it comes to building insurance.  I will try and cover this question as best I can within the framework of insurance cover as well as what is covered and what is not.

There are two scenarios when it comes to pipes specifically, and the type of water damage caused.

Let’s have a look at them individually:

1. SUDDEN BURST WITH OR WITHOUT RESULTANT DAMAGE

This would be a pipe that has failed under pressure with no sign of rust, corrosion, normal wear and tear, gradual deterioration, or pinholes.

Burst pipes are often accompanied by resultant water damage that has set in very quickly. An example of a burst pipe in the wall would be significant water loss in a very short time, water pushing through the wall and causing damage to the carpets or laminate flooring for instance.

2. LEAKING OF DETERIORATED PIPES

A leak will develop over a long period of time from inside the pipe due to rust, corrosion, normal wear and tear, gradual deterioration, or pinholes. This will lead to the pipe wall weakening from the inside.

You will likely notice a damp patch on the wall indicating the presence of the leak. This could lead to mold build-up or paint peeling. Even though the final failure of the pipe is sudden, the cause of the failure remains excluded.

To determine if the incident is a valid claim, we need to refer to the definition of damage in terms of Insurance. The following definition was obtained from the Community Living Policy Wording of CIA – Commercial and industrial Acceptances (Pty) Ltd and can be downloaded from their website at www.cia.co.za

“Damage means physical loss or damage caused by a single, sudden, unintentional and unexpected event, which occurs at an identifiable time.”

By the above definition, a valid claim or loss is something that happens suddenly and unforeseen, within the framework of your cover agreed to between yourself and the insurance company. The Insured also agrees, as per the policy Terms and Conditions, to ensure that proper care is taken to keep the property in a good state of repair to limit or prevent losses from occurring by means of regular maintenance to the insured property. You may refer to your Policy Conditions for more information on this.

When will a claim be valid?

1. SUDDEN BURST PIPE WITH OR WITHOUT RESULTANT DAMAGE

This is a valid insurance claim. This is a sudden failure of a pipe in good condition. The pipe was not leaking due to rust, corrosion, normal wear and tear, gradual deterioration, or pinholes. The repair of the pipe will be covered, subject to the policy terms and conditions.

The claim will cover both the burst pipe (including the opening and closing of the leak site) and the resultant water damage.

2. DETERIORATED PIPE FAILURE

This is not a valid insurance claim. Due to the cause of the failure occurring over a period of time (not sudden and unforeseen) it will be excluded from cover on the insurance policy. The exclusion includes all facets of the leak repair including the following:

• Leak detection
• Opening the leak site (this is consequential damage and not resultant damage)
• Replacement of the pipe and
• The closure of the leak site such as replacing wall tiles.

Due to the cause of the leak being excluded, there is a possibility that the resultant damage may also be rejected.

Every claim is considered on its own merit which is why it is important to provide the insurer with as much information as possible. The following is required from you, the insured, to assist the insurer in determining if a pipe claim is valid:

• Photos of the leak site before the pipe is repaired
• Photos of the pipe before it is repaired
• A damage report from the contractor confirming the condition of the pipe before repairs, advising if there was any rust, corrosion etc.
• An invoice for the repair of the leak

The decision to approve or reject a claim remains the prerogative of the insurer based on the information provided by the insured and the terms and conditions of the policy wording.

It is always good practice to notify your insurer of any damage as soon as you notice it to avoid claims being rejected due to late notification or time lapse prejudicing the insurer.

May this provide some clarity towards cover on water pipes and the claims thereof.

For more information on your specific policy, please contact your broker.