Emergency Plumbing and Insurance: What Sydney Homeowners Need to Know Before Filing a Claim

Damage caused by a ruptured pipe is likely covered by your insurance. However, what you’re able to say when describing it, what type of evidence you gather, and what kind of plumber’s report you give can make the difference between paying out and not.

A problem most people don’t anticipate when they first purchase home insurance: that the cover will almost always be for the damage caused when a pipe bursts, but not the replacement of the pipe itself. Repeat that, because it is important!

Most disagreements between homeowners and insurance companies regarding plumbing emergencies concern what type of insurance coverage to expect and what is not covered. Knowing the rules before the emergency occurs will significantly improve your chances of successful outcome if you have an emergency.

What's Typically Covered

Sudden and accidental floods. An unexpected pipe burst, flexi hose failure or catastrophic failure of a hot water tank are “escape of liquid” events normally covered by most home insurance policies. What the policy pays for is the damage to your flooring, your walls, your cabinetry etc., and your property.

Trace and access. Most policies will also contain trace and access cover, which pays for the trace if the leak is hidden (in a wall, beneath a floor or above ceiling). This can be by cutting through plasterboard, raising flooring tiles, or through the use of thermal imaging equipment. It does not come with the work to fix the pipe when it has been located.

Temporary accommodation. Most policies cover temporary accommodation in the event that the damage to the home is said to be too damaging for the property to reside in for a certain period of time. This is particularly true in the case of a very extensive pipe burst that needs a great deal of drying, mould remediation and floor replacement.

What's Usually Not Covered

Repairing the pipe itself. You have to pay to fix the break, for the failed flexi hose, as well as for the new copper or PVC. The purpose of insurance is to address what occurred or the consequence (water damage), not the reason (pipe failure).

Gradual damage. This is the most prevalent claim rejection. In some cases, a leak has been graceful and building up for a while, such as a pinhole leak in a copper pipe that has developed behind the wall or a leaky joint that has been deteriorating over weeks or even months, and insurers classify these leaks as “gradual damage” due to maintenance failures. All of Australia’s big insurers exclude coverage for gradual damage.

Pre-existing damage. If the pipe were corroded, leaking or in disrepair prior to the incident, the claim might be denied. That is why routine plumbing upkeep isn’t simply a best practice, but rather the distinction between a legitimate claim and an excluded claim.

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Chubb Insurance recently saw the number of water damage claims soar 72%, and the average water damage payout increased from $17,627 to $30,361. The claims that are paid are those that did not involve a lack of maintenance by the home owner, but were simply the result of a failure of which the homeowner was unaware; the damage also had to have occurred rapidly and the homeowner needed to have reacted quickly.

The Language Trap

It’s subtle but significant. The definitions of words you choose to use when you report a water damage incident to your insurer can significantly determine whether it’s classified as sudden or gradual, which, in turn, can make the difference in coverage.

If you announce to the assessor “the pipe has been leaking for some time and then finally it burst,” then there you have: “Gradual Damage.” Even if it is ” I noticed a tiny damp patch last week and today the pipe burst,” as the insurer hears it, the situation is one that has slowly been deteriorating and should have been fixed.

Be precise. Be accurate. Give an account of what happened, rather than what you think was happening before. “Suddenly at 11 pm I found some water on the floor and I had to shut all the water and immediately call a licensed plumber.” It’s a sudden, a fortuitous occurrence. This is what the policy addresses.

With honesty being at issue here, it’s not about being dishonest. It’s all about precision! If a pipe really did fail out of the blue, say so! If you really don’t know the duration of the leak, tell them, since if they find out and it turns out you were wrong, it will hurt you.

The Plumber's Report Plays A Vital Role In Enhancing Your Claim

One document from a licensed plumber is the most effective thing you could present and explain to your insurance provider. It enables the assessor to have a few pre-stated requirements:

The reason for the failure. Corroded joint, burst flexi hose, failed valve? The technical description of the incident by the plumber assists the assessor in arriving at the correct classification of the incident.

The failure was sudden or not. A plumber will know the difference between pipe that has broken because of a sudden surge of pressure (a clean break) and pipe that has broken as the result of corrosion, mineral deposits and year-by-year deterioration (a ruptured hose).

How severe the damage is. The extent of the damage, structural damage (framing, subfloor etc), volume of water involved and rooms affected.

The repair was performed. What was accomplished, what components were applied and what the fact that it works now and is safe are indications of.

A report is provided for each emergency job. It’s included in the service—not an extra charge. We actually write it in a very clear way, like insurance assessors can easily understand, because we know what information they require.

How to Maximise your Claim

Act immediately. One factor insurers take into consideration is how long it takes for response. A homeowner who finds water in the basement or leaks on the walls and acts promptly, calling the plumber within the hour would be considered reasonable. The homeowner who grubbed for the exact same broken pipe and waited three days is not in a hurry, and this may affect the winning amount.

Photograph all areas prior to cleanup. Overviews of each affected room. Topographic plots of the failure points. Photographs of water-level. It’s important to have timelines; your phone times keep track of that.

Save the failed component. Keep them if the plumber takes off a broken flexi hose or a broken section of pipe. The insurance assessor may wish to take a look at it.

Check with the plumber’s report. See above. This is the most critical document.

Don’t delay repairs. Some property owners delay repairs until the insurer’s assessor has come and gone under the assumption this will assist the claim. In practice, taking measures to fend off additional harm, e.g., cleaning up mold spores from standing water, may actually be to take away postponement from your payments. You should take “reasonable” measures to minimize damage, and insurers are looking for this. Fix the pipe. Dry the area. Document everything. The Assessor may check up later.

There’s no better time than before you need your home insurance policy to review your policy. Inspect “escape of liquid” cover. See how much of an excess you have. Look into if there is a separate contents insurance as well as building insurance. Then explicitly inquire about whether they cover damage caused by the leak occurring over time, because you’ll find most likely, they do not, and it will affect how you do plumbing maintenance.