Water leaks and insurance: some free flowing advice

Admittedly this is a longer blog than most, but essential reading if you've got a problem with water pipes and your household insurer.
 
Now, if there's a leak in a water pipe under your property you are normally responsible, not the water company.
 
And that's exactly why most people have insurance: to make sure that if their water happens to leak away, their cash doesn't necessarily follow it down the drain.
 
Well that's all fine and dandy if your insurance company deals with your claim fairly but as our film below shows, Halifax aren't exactly giving customers that 'little bit extra' - and they're not alone - other companies are also refusing to pay up.
 
Essentially, some insurance companies are making a nasty habit of deciding that water leaks are caused by 'wear and tear' without even visiting the address. And why's that? Well, because unlike 'accidental damage', 'wear and tear' is NOT normally covered on insurance.
 
How very, very convenient.
 
And if you argue and say 'hang on, surely this leak is accidental damage' they tend to reply 'prove it'.
 
How very very inconvenient because to prove it you'd have to dig up your drive, garden or even the foundations of your house, and all at YOUR cost.
 
So what can you do?
 
Step one: don't be put off by the first rejection
  
Some insurance companies don't want to pay up for water leaks so they try to put customers off. If they reject a claim saying the leak is 'wear and tear' and not covered by the policy, few people will challenge this. But just because they tell you a leak is 'wear and tear' it doesn't mean it always is. There's still hope but you've got to do the work and put your case forward - don't fall at the first hurdle.
 
Step two: check your policy
 
How does your insurance company define accidental damage? For example Halifax says accidental damage is:
 
'damage which has not been caused on purpose, or which was not inevitable'.
 
So was it inevitable that your pipe would suddenly leak? If it's made from durable plastic it should last for a very long time and it's certainly not inevitable that it will leak. And did you dig up your pipe and deliberately sabotage it? If the answer to that is 'no' then you certainly have a case.
 
Step three: put your argument forward and make your claim
 
Your first claim may have already been rejected because the insurance company said the leak was 'wear and tear'. But don't be deterred, claim again and this time include a note suggesting why you think your leak counts as accidental damage.
 
For example, if you are with Halifax, pay attention to their definition of accidental damage: state why you don't believe it was 'inevitable' that the pipes would leak and declare that the pipes weren't damaged 'on purpose' - I'm innocently assuming they weren't :-)
 
Step four: take it to the bitter end
 
At this point the ball is in the insurance company's court. They may accept your claim and pay up, although I must say that didn't happen at this stage in any of the cases we followed.
 
But importantly at this point the onus is now on the insurance company TO PROVE the damage is wear and tear. You've put your reasons forward arguing it's accidental damage (step 3) so now they have to put up or shut up: they either put up and prove it's 'wear and tear' (by digging up the leak) or shut up by paying you for the claim.
 
So what if they stubbornly refuse to do anything? Well that's quite likely and only leaves one option: you have to take it to the bitter end by writing, explaining your case, to the Financial Ombudsman Service. The Ombudsman will then make a decision on whether the insurance company should pay up.
 
This may seem like a lot of work but in all the cases that Jock, the water engineer in our film, has so far put forward (at the time of writing), the Ombudsman has found that the insurance company should pay up in every case (see links below).
 
What if I've already paid for the work - can I claim the money back later?
 
Yes, if you think the insurance company should have paid up then you are absolutely entitled to make your claim and go through the steps outlined above. After all, a water leak is often a serious emergency and you simply can't wait for claims to be rejected or for appeals to the Ombudsman to succeed before you get the problem fixed.
 
So, all in all, don't be afraid to challenge your insurance company - it's quite possible that you are covered and often they should pay to fix a water leak, no matter what they say when you make your initial claim.

Useful info:

Check out this recent decision by the Ombudsman to make the insurance company pay: page1 & page2 (Note the highlighted paragraphs - my emphasis, not the FOS's)
 
Helpful online leaflet from the Financial Ombudsman: 'Your Complaint and the Ombudsman'

The Financial Ombudsman Service is an independent body that decides on complaints about general insurance:

The Financial Ombudsman Service
South Quay Plaza
183 Marsh Wall
London E14 9SR

Tel: 0300 123 9 123
Tel: 0845 080 1800

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