Do you understand the difference between flood, escape of water and water ingress? And what steps you can take to help avoid expense and damage?
The common misconception about escape of water cover is that it will protect you against all water damage in your home. However, this isn’t the case.
For most of us, water damage in the home ranks among our worst nightmares, not least because it has such a long tail of waiting for everything to dry out before you can redecorate, and life can get back to normal. Even worse is finding that you weren’t fully insured for the damage – if at all – and that you missed the opportunity to take preventive action and avoid the whole sorry mess.
In a block of flats, where the buildings insurance is arranged by the management company or agents, it can be tempting to assume that they have automatically covered all the bases but do take time to check your cover. There may be omissions or excesses and exclusions that have crept in over the years as a result of your claims history.
Water damage falls into three broad categories:
- Escape of water.
- Water ingress due to flooding from outside the building.
- Water ingress due to sudden structural damage or wear and tear/penetrating damp.
Not all of these automatically covered by many buildings policies and occupants will need their own contents cover for damage to personal furniture, carpets and possessions. (Fitted kitchens and bathrooms are part of the fabric of the building are covered by the buildings policy).
If you are involved in managing a block of flats and arranging the buildings insurance, it might be an idea to remind your neighbours not to fall into the trap of thinking they don’t need their own contents cover. They may have contents cover included in the buildings insurance policy schedule and not realise that it only covers the contents in the communal areas, not their home.
Escape of water
As a rule of thumb definition, if water has escaped from where it normally flows within your property and this has caused damage, your insurer is likely to deem it an escape of water claim.
It is consistently at or near the top of the list for most claims against buildings insurance policies(1), and in blocks of flats it can be particularly problematic because an escape from a small leak can end up causing damage to several flats. In fact, the first you know of a leak in your flat might be when the neighbours downstairs report a brown stain on their ceiling!
Buildings insurance policies for blocks of flats should offer cover for damage caused by escape of water as standard. Beware though, that while your policy may cover the cost of repairing the leak and any damage caused, finding it – known as ‘trace and access’ – isn’t always included. So, if floorboards and walls were ripped out to find the source of the leak, the cost of making good would fall on the occupants (probably added to the service charges). Do check to see if your policy includes trace and access costs. You may also want to ensure that you have covered for accidental damage, such as an over-flowing bath or DiY disasters.
Even if you do have the reassurance of a comprehensive insurance policy, you do need to maintain the building. If a slow leak causes damage that you could reasonably have known about and rectified, it could invalidate any claim, or increase your future premiums or excesses.
We’re all used to the concept of “fair use” and “no claims” in other areas of life and insurance, so it will be no surprise that repeated claims for escape of water will naturally rings bells at the insurance company, and sooner or later excesses or premiums may have to rise. In extreme cases, and insurer may refuse to offer cover for escape of water at all.
Deacon has some useful tips on avoiding damage for you here:
Why preventing escape of water should be a top priority (3) for every flat owner.
Flooding or flood damage is caused by an ingress of water into your property from an external source. For instance, if a river nearby burst its banks due to heavy rain causing damage to your property, this would be regarded as ‘flood damage’.
While there is an insurance industry scheme (4) to help individual homeowners obtain affordable flood insurance, it only rarely apples to flats (some blocks of three or fewer flat qualify). That is because a block of flats is treated as a commercial building. So leaseholders pay the full costs of flood cover under their buildings policy.
While it may seem that the risk from flooding in flats is very low, to the ground floor and any basement only, do remember outhouses and utilities service the whole building may be affected. This is cover that you do need, and the costs will be related to your specific, local risk.
Even if the building isn’t actually inundated, water ingress due to flooding outside should be included in flood insurance, unlike water ingress due to wear and tear or poor maintenance (see below).
Common causes of flooding in buildings are sewer overflows and rising groundwater and there is little you can do to prevent them so make sure you are insured appropriately.
Many buildings and contents home insurance policies won’t cover you for damage caused by damp and condensation or structural faults that can be attributed to wear and tear – although they usually can do so if the cause is sudden storm or impact damage. Some insurers so offer specific cover for rising damp, but generally prevention is better than cure.
The way to help avoid damp problems is to have a programme of planned preventive maintenance not least because excessive moisture in buildings can lead to a whole host of issues including staining and mould, which can cause some serious health problems if left unchecked. It’s important to work out what is going on, seeking external professional advice form a surveyor or expert damp professional if need be. They will have tools like infrared cameras and may recommend water tests to determine the source of water (rain, foul or tap).
The easiest problem to solve is condensation (5) – and it can require little more than ventilation.
Rising damp is caused by water from the ground which is not being stopped by any damp proof course. This is typically found in older buildings without a damp proof course, or where the course has been damaged and bridged over time. The tell-tale signs are damp stains rising to about 1m to 1.5m high and often there will be white, powdery nitrate salts on the surface.
Penetrating damp from the outside is generally caused by poor building maintenance, or defects in the building, such as cracks in walls, broken and blocked gutters, rotten or badly fitting window frames or cistern overflows continuously dripping onto the wall rather than down a well-designed downpipe.
Tell-tale signs of penetrating damp include dripping and puddles, wet and crumbling plaster, damp stains circles on internal and external walls which will typically darken during periods of rainfall. When they appear, it is essential to act to stop the damage at source because it is unlikely that your buildings insurance will cover the repairs if you let the damage set in.
The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited trading as Deacon accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.