Your insurance policy is not a maintenance contract

10 November 2021Old Mutual Insure via FA News

By Lizo Mnguni, Old Mutual Insure spokesperson

All too often consumers assume their insurance policy is a maintenance contract, but this is one of the biggest reasons for claims being rejected by insurers.

This is according to Old Mutual Insure spokesperson, Lizo Mnguni, who says that homeowners who neglect to maintain their home are often in for nasty surprises at claims stage.

“If you have not maintained your home properly and this leads to more serious damage, then it is very likely that your insurer won’t pay out,” explains Mnguni. “This often happens when people don’t understand what they are buying, and mistakenly expect their insurance policy to cover everything.”

The purpose of your insurance policy, Mnguni maintains, is to ensure that you are covered against unforeseen events, which excludes normal wear and tear.
“An example of someone treating their policy like a maintenance contract is say, if you have not cleaned out your gutters ahead of rainy season and it causes a pool of water to start seeping into your ceiling, which in turn causes it to rot and mould to develop. This would not be an insured event.”

Many claims received by Old Mutual Insure are rejected due to being maintenance related, which highlights the extent of the problem.

“To avoid the likelihood of this happening, you must make sure you understand your insurance contract as well as its exclusions and speak to your broker to get clarity. Your broker can also guide you on what is a legitimate claim, and what would likely be rejected.”

He says that if you notice deterioration in and around your home (e.g. a damp patch, a pipe dripping) and you are worried you’ll need to make an insurance claim, tell your broker as soon as possible, who can advise further.

Mnguni says that homeowners are required to perform proactive risk management by maintaining their home, which if done diligently, can lead to a reduced premium in the future.

“Part of this includes making sure you have adequate cover in place should something unforeseen happen. But also remember you have a duty of care to make sure that even though you are insured, you are not taking huge risks with your property.”

He reminds policyholders that when buying a new home, they must, in the excitement of the purchase, not forget to account for the financial costs of its upkeep.

“The financial implications of finding out you are not covered for an event due to not taking proper care of your home, can be far more costly than committing to a diligent maintenance programme of your home,” says Mnguni.

Another tip he gives policyholders is to always keep proof of all of maintenance work – e.g. alarm repairs and servicing, “which can really help you out at claim stage.”

He explains in the case of a legitimate claim, where a historic home has experienced a burst water pipe or cracked roof tiles due to storm damage (for example), it can sometimes get more complicated, given that it is very difficult to replace items like tiles or carpets if they have been discontinued, and some insurers may pay you either for its replacement value, or as new (but with depreciation accounted for).

“The point of insurance is to put you back in the same position before the loss occurred, so in these cases your insurer will pay you in cash (replacement value) if they cannot replace an item due to it no longer being in circuit.”

He adds that if you specify a very special “irreplaceable” item, your home contents policy should cover it on a global basis. Meaning that if you experience a loss, and the value of the item is below the total of your home contents policy, it is covered; but if it is above the sum total, then your insurer will most likely only pay a portion of your claim.

Below are some helpful tips from Mnguni to be proactive about your home maintenance programme, especially in light of the upcoming festive season and summer holidays:

• Check exterior painting for peeling and cracking which may result from potential water leaks or moisture problems. Repairing mortar walls and chimneys becomes necessary if:

1. Mortar is missing or cracked
2. Bricks or stones are loose
3. Walls are damp or plaster work is damaged

• Perform seasonal maintenance e.g. ahead of the rainy and thunderstorm season, which happens in Summer in some parts of the country, clean your gutters, air conditioning units and trim your trees and shrubs. Also clean your chimneys and inspect the structure for leaks.
• Consider getting licensed maintenance contractors (plumbers, electricians and other tradesmen) to inspect your property, including hard to see places like roofs, for debris or obstructions. Inspect your geyser – it may be time to replace it to prevent the damage from a burst one.
• Ensure proper ventilation in places that you don’t often go in your home (e.g. in your ceiling) to prevent excess moisture from creating damp.
• Service your alarm system and ensure that your home safety devices are in working condition (e.g. electric fences and gate motors). This is especially important before going on holiday and leaving the house unattended.

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