What are Gradual Leak Exclusions?
Imagine you are sitting at home, enjoying a cup of tea, when you notice a damp spot on the ceiling. Over time, that spot grows, and you realise you have a leak. You put in a claim with your insurer, only to find out your claim is denied because of a “gradual leak exclusion”. Now, what does this mean?
Gradual leak exclusions are clauses in your home and contents insurance policy that may deny coverage for damage caused by slow, continuous leaks. These exclusions are commonly found in the “Escape of Liquid” cover section of your policy. Understanding how these exclusions work and how they may affect your claims is crucial.
The term “gradual” can be subjective and varies from one insurer to another. Here’s what you need to know:
● If your claim was denied on the grounds of a gradual leak, check how your policy defines “gradual.”
● If the term is poorly defined or not defined at all, or if the interpretation was unfair, you might have grounds to contest the decision.
Some insurance policies exclude gradual leaks only if you could have reasonably been aware of them.
● If your insurance policy states that gradual leaks are excluded; you could have reasonably noticed the condition.
● Whilst, other insurers, do not consider your awareness and exclude all gradual leaks regardless of whether you could have detected them or not.
Certain types of gradual leaks are specifically excluded in many policies. For example:
● Shower Base Leaks: Many policies exclude leaks from a shower base, regardless of whether they are gradual or not.
It’s important to review your policy for specific exclusions that might impact your claim, such as these shower base exclusions.
● Understand Your Coverage: Take the time to understand the definitions and exclusions related to gradual leaks in your policy.
● Look for Ambiguities: Identify any ambiguous terms or clauses that might affect your coverage.
Regular Maintenance and Inspections
● Inspect Regularly: Regularly check your home for signs of leaks and address any issues promptly.
● Keep Records: Maintain records of maintenance and repairs as evidence of your efforts to prevent leaks.
● Report Immediately: Notify your insurer of any leaks or water damage as soon as you become aware of them.
● Avoid Delays: Delaying a report can lead to complications or denials based on gradual leak exclusions.
What to Do If Your Claim Is Denied
● Detailed Explanation: Ask your insurer for a detailed explanation of why your claim was denied. They are required to clarify their decision under the General Insurance Code of Practice.
● Policy References: Request references to specific policy clauses or definitions used in the decision-making process.
Lodge a Complaint with the Insurer or AFCA
● Insurer Complaint: If the claims team refuses to overturn your decision, lodge a complaint with the insurer directly.
● AFCA Complaint: If they continue to decline your claim unfairly, you can escalate the matter to the Australian Financial Complaints Authority (AFCA).
Understanding gradual leak exclusions is essential to ensure you are adequately covered and prepared to handle any disputes with your insurer. By being informed and proactive, you can better protect your home and contents from water damage and ensure fair treatment under your insurance policy.
Stay vigilant, keep your home in good repair and don’t hesitate to question your insurer if something doesn’t seem right. Your peace of mind and your home’s safety are worth it.
Note: This blog post provides general information only for educational purposes and does not take into account your specific circumstances. You should seek professional legal or financial advice tailored to your personal situation before making any decisions or taking any action based on the information provided in this blog.