Storm / Flood Claim Declined by Insurance Company Due to Late Notification. FSPO – Decision Ref: 2019-0112

Background

The complaint relates to the Insurers declinature of the storm / flood claim made by the Complainant for his rented property under his buildings cover only insurance policy for damage as a result of Storm/Flood.

The Complainants Case

A series of Storms/Floods have resulted in damage to the gable end of the Complainants building and internal damage. The Complainant has expended €22,223 on repairs to secure the property from further ingress of water.

The property has been in the family for over 40 years. In that time no ingress of water occurred to the property. The first recorded ingress of which the Complainant was made aware by his tenant was in December 2015 which was mentioned as a minor problem which dried up very quickly and therefore the Complainant didn’t consider an insurance claim under the Insurance Policy. In 2017 the Complainants tenant made contact again following a further ingress. Again the water came and dried out quickly and damaged internal fixtures/fittings and furniture. The ingress only took place in Storm and Flood conditions.

For a long period the Complainant considered whether the issue was a result of some failure of the City Council infrastructure, the City Council carried out some investigations which proved that the water did not come from an underground source within its control.

In Late 2017 the Complainant decided that repair work was needed and engaged with his building contractor. The contractors investigations were fulsome and were inconclusive as to the exact point of entry of the storm water. The repair work were carried out in early 2018 which included a membrane which was put in place to make the wall watertight again. Since the repair there has been a number of severe weather events and no ingress had occurred.

The Complainant stated that the reason for the late notification were that he did not consider the ingresses to be something which might be covered by his insurance policy until 2017 and was conducting his own investigations. Furthermore, the Complainant disagrees with Insurers response that no damage has arisen from an insured peril by the policy and stated that “the damage to the gable end wall was clearly as a result of severe weather events. The ingress only occurred at those times. In the 40 years of occupancy it only developed from 2015 with these Storms and Floods which have became more common. It does not constitute normal Wear and tear. It clearly occurred as a result of Storms/Floods – a cause which is covered”.

The Complainant further states the following,

• “The met reports prove an extreme of rainfall on the day which caused a sudden ingress
• The Insurer were in no way prejudiced by my continued investigation of a transient issue. It was not constant or persistent. It only occurred in times of extreme weather and went away again as quickly as it came due to good soil percolation thereby losing its priority or seriousness.
• If this is not Flood then it is the result of Storm
• The damage to the property was caused by particular volumes of water which developed in periods of heavy rain beyond normal levels. To attempt to avoid my claim on the basis that the wording does not extend to cover such event where the water has on rare occasions entered the premises is a gross breach of contract. Water entered the property. The Insurers agent accepted this. The source could not be identified but over a considerable time it became clear it did not come from underground drains or pipes”.

The Complainant states that the Insurer “arrived at an unreasonable conclusion in relation to the Reporting aspect of the Claim and an incorrect interpretation of the insurance cover. The Complainant seeks for the Insurer to admit the claim and pay for his loss/damage which in this case is €22,223.

The Insurers Case

The Insurers records indicate that the Complainant first telephoned the Insurer on the 25 September 2017 to advise that water had been entering his property at ground level since February 2017. The Insurer appointed a Loss Adjuster on their behalf. The Loss Adjuster carried out an inspection where he met with Complainants builder and his tenant. The tenant informed the Loss Adjuster that a small amount of water ingress first arose in September 2014.

The tenant first advised the Complainant of the water ingress issue in December 2015. The Insurer was not notified until September 2017, which is a significant delay in notification and in breach of the terms and conditions of the Complainants policy.

The Loss Adjuster concluded that there was no evidence to confirm the operation of an insured event, like Storm or Flood, for which the policy might provide cover.

The Insurer notes that water first entered the Complainants property in September 2014, again on 31 December 2015 and then on 6 February, 14 February, 5 March, 9 March, 20 September, 27 September and 19 October 2017. The Insurer has attempted to identify the reason the water entered the property. The water entered via the gable end of the property, but the exact reason was not identified. As the repair was successful, the Insurer assumes that prior to the repairs, rainwater had been running along the exterior footpath, striking the gable end and breaching the brickwork and damp proof membrane if installed.

The Insurer then considered whether the rainfall on each of the known dates may have resulted in a Flood. In this regard the Insurer obtained from Met Eireann the hourly rainfall recorded locally on the dates known.

In reviewing the data obtained from Met Eireann, the Insurer calculated 11 hours out of 192 hours can be classified as having heavy rainfall, six of which were on 27 September 2017. The Insurer is therefore of the view that only the rainfall on that date could have led to flooding, however on review of its records for the area , no flood claims were reported.  For this reason the Insurer is of the opinion that flood conditions did not occur on 27 September 2017.

The Complainant submitted a claim for €22,223 for repair and preventive work. The policy provides cover for loss or damage cause by an insured event, that is , repair work as a direct result of an insured event, like Storm or Flood. It does not provide cover for work required to prevent a re occurrence of an event.

The Insurers stated that it is satisfied that it correctly declined the Complainants claim as it concluded that a flood did not occur and that the water entered the premises gradually, the general policy exclusion excludes gradual deterioration or any gradually operating causes. In addition, the Complainant delayed in notifying the Insurer of the claim, which is a breach of the policy terms and conditions.

 

Decision

Home insurance policies, like all insurance policies, do not provide cover for every event. Rather the cover will be subject to the terms and conditions of the policy. In this regard, the ‘Terms and Conditions’ section of the applicable Policy Document provides, at pg. 28, as follow:

“CLAIMS – YOUR DUTIES AND OUR RIGHTS

                WHAT YOU MUST DO

Tell Us IMMEDIATELY of any loss, damage or accident and give details of how the loss, damage or accident occurred. You will be required to produce, at your own expense, all necessary documents and information to support any loss and forward those to Us, together with completed Claim Form, within 30 days of first notifying Us of the loss.

In this case from the evidence provided the water first entered the Complainants property in September 2014, again on 31 December 2015 and so on. The Complainant failed in his obligation to notify the Insurer “IMMEDIATELY” of his loss and thus was in breach of one of the general terms and conditions of his insurance policy.

FSPO accepts that it would have been reasonable for an Insurer to rely solely on the Complainants delay in notification of his loss to decline the Complainants claim in accordance with the policy terms and conditions. The Insurer assessed the loss regardless to determine whether there was the operation of an insured event, like Storm or Flood.

Insurers Loss Adjuster inspected the property on 27 September 2017 and it became evident that the first ingress of water was as far back as September 2014. Loss Adjusters Report, dated 28 March 2018, concluded as follows:

“At the time of our site inspection we did not observe any insured event for which this policy might extend to provide cover for. The insured has not proven the ingress of water in the property was as a result of an insured event.

We note the relevant policy wording and general exclusion in terms of gradual deterioration or any gradually operating cause which are excluded for as follow:

• Gradual deterioration or any gradually operating cause”

In this regard, the ‘General Exclusions’ section of the applicable Policy Document provides, among, at pg. 31 as follows:

“WEAR,TEAR AND AS UNDERNOTED

• Wear, tear, rust or corrosion.
• Gradual deterioration or any gradually operating cause”

In addition, the Insurance Loss Adjuster also concluded that the claim should be declined due to the Complainants failure to notify the Insurer of the claim when it first occurred.

The FSPO accepts that it was reasonable from the evidence provided and in accordance with the policy terms and conditions, for the Insurer to decline the Complainants claim due to the delay in notifying the claim.

The FSPO does not uphold this complaint.