Don’t expect your insurance company to fund the maintenance of your home

You cannot expect your homeowner’s policy to cover the ongoing maintenance of your home, even though, under specified conditions, it will cover the replacement or repair of certain fixtures and direct damage caused by the failure of those fixtures.

In a case study in a recent Briefcase newsletter from the office of Dennis Jooste, the Ombudsman for Short- term Insurance, a home owner learned the hard way that he could not expect his insurer to pay for his plumbing problems.

Property owner Mr A submitted to his insurer, Absa, several claims for leaking water pipes. When dealing with his last claim, Absa told him it was placing an endorsement on the policy that would exclude any future damage caused by leaking pipes. Mr A was unhappy with the endorsement, being of the view that, by paying a premium, he should be covered accordingly.

In its response to Mr A’s complaint to the ombudsman, Absa said that since the inception of Mr A’s policy in November 2012, Mr A had submitted three claims relating to leaking pipes, which displayed cer- tain similarities. Absa reviewed the claims and undertook an assessment of the property. It was discovered that the copper pipes on the property were pitted and required urgent replacing. Absa advised Mr A accordingly and placed an endorsement on the policy that no future damage caused by leaking pipes would be covered.

Absa also referred to the relevant section of the policy agreement, which stated that Mr A would be compensated for “the repair or replacement of a section of a burst or leaking water pipe. Failure of water pipes must have occurred sud- denly, and the failure point must have been detected using conventional equipment and methods by an approved and qualified service provider.

“Failures of concealed water pipes due to rust, corrosion, gradual deterioration or wear and tear will be repaired on the first occasion only. The policy will thereafter be endorsed to exclude failures from water pipes that have evidence of rust and corrosion until they have been repaired or replaced.”

The ombudsman said that the intention of the policy wording was clear and unambiguous. The insurer clearly did not intend to cover damage caused by leaking pipes in instances where there was a maintenance-related problem. He said that the insurer provided evidence that the pipes were in urgent need of replacement. It was also clear from the wording of the policy agreement that the insurer was entitled to place an endorsement on the policy and to decline subsequent claims submitted by Mr A for this type of damage.

‘NOT RESPONSIBLE’

Mr A felt that he should not be responsible for the replacement of the pipes, because the property was bonded with Absa and he was not aware of the problem when he bought the house.

The ombudsman told him that even though Absa might have assessed the property before granting him a bond, the assessment was solely to establish that the property offered sufficient security on the bond. It is not the responsibility of the mortgagee to assess and determine the structural integrity of the property, he said.

The ombudsman upheld Absa’s decision to reject the claim as well as its placement of an endorsement on the policy.

Says the ombudsman: “It is important to remember that, when purchasing a property, the onus is on you to satisfy yourself that the construction of the property is not defective in any form. Property is purchased ‘ voetstoets’, and any claim for latent or patent defects, which become evident after the transfer of ownership, must be directed to the previous owner.

“Your insurance company will not cover you for maintenance, and you should conduct regular maintenance checks of your property and attend to necessary repairs.”