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Tin roof …. rusted?! Maintain what you insure!7 September 2017

One of toughest things we have to do as insurance brokers is explain to clients that their claim will not be covered by their policy due to an exclusion clause. All policies have them. Some are relatively standard, and some vary by policy type and provider.

As brokers, we go to great lengths to recommend and obtain the broadest protection available for our clients, however there are some things that we just cannot get insurance cover for. When it comes to property policies, a common exclusion clause relates to buildings or parts of a building that are in a deteriorated condition. Sometimes these deteriorations are readily apparent, however some are hidden away behind walls or in roof spaces and only become apparent when a problem occurs.

Over the past few years, when it comes to insurance claims arising from natural disasters like storms and bushfires, we have seen several otherwise-valid claims be fully or partially rejected due to the already poor or deteriorated condition of buildings that were damaged or destroyed by the disaster event.

Common conditions that may trigger a claim exclusion include;

  • Rust and corrosion, such as steel sheet roofing.
  • Deterioration, such a rotten timber in roof structures.
  • Settling or earth movement, such as the gradual cracking of walls arising from deficiencies related to how the older building was constructed.
  • Termite damage (not only do these little pests do great damage, they can void your insurance).

Even though your policy may have covered a particular insured event (like a storm), if the exclusion criteria is triggered due to pre-existing deterioration or poor maintenance, unfortunately your loss is likely to be excluded from your cover. An insured event cannot be relied upon to replace something that needed to be replaced anyway. This common law insurance principle is known as “proximate cause”.

There are really only a few solutions to avoid falling victim to these deterioration exclusion clauses. Regular building inspections, proactivity and vigilance go a long way.

  • Keep your gutters clean, your roof free of debris, and have regular termite inspections.
  • The cost of regular maintenance is generally far more economical than taking a one-off financial hit when something wears out or breaks down. Keep your timbers painted / sealed, and if items need to be replaced or repaired, bite the bullet rather than accumulating deterioration. Create a budget for home maintenance.
  • Keep water away from structures. Leaking pipes, gutters, water pooling, deteriorated paintwork and broken tiles cause a lot of damage. Dampness also may attract termites, particularly in the warmer months.

“Tin Roof … Rusted” might be a great line from the famous B52’s song, but if you want to make sure you’re not left out in the cold by an insurance policy exclusion, don’t let it happen to your Love Shack!

If you’d like to discuss your property cover please call one Shield’s experienced team of insurance brokers.

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