Tips on claiming home insurance for flooding and leakage

Chinese culture often associates water with wealth. While an overflowing wallet would be good, a flooded home, which costs money to fix, would not. Regardless of a building's age, there are always water-related risks such as water damaged floors, leakage from pipes, or even damaged elevators from burst pipes, etc. The cost of repairs and liability can be very high, easily running tens to hundreds of thousand dollars. Home insurance can come in very handy to relieve such unexpected financial pressure. The following explains which "water-damaged" items are covered by home insurance, how to submit claims and what areas require special attention.

Firstly, water leakage or pipe bursting resulting from lack of maintenance or age are considered natural wear and tear, which fall outside the scope of coverage. As such, insurance companies would not reimburse the cost of repairing the pipes concerned. However, pipes damaged by an accident, such as when a neighbour broke the insured's pipe when renovating, are not considered natural wear and tear or lack of maintenance. If the insured has purchased additional all-risks coverage protecting the structural parts of the building (often referred to as "fire insurance") on top of home insurance, the policy would cover the cost of repairing the accidentally damaged pipe.

Secondly, home insurance typically would cover damage to furniture, home appliances, personal items and other household contents as well as third party liability for property damage that results from flooding due to burst pipes. Some policies would provide temporary housing or lost rental income based on the scope of coverage. For instance, if as a result of serious flooding due to an accidentally burst pipe, your home requires comprehensive renovation, rendering it uninhabitable, the insurance would provide a specified sum based on the duration of required renovation to cover the cost of temporary housing. Naturally, the insurance company will base its final decision on whether to honour a claim on the actual degree of damage and the scope of the policy.

There are also cases where a burst pipe affected the apartment below the insured's unit, which resulted in damages being sought for water leakage or drippage from their ceiling. According to coverage for third party liability under home insurance, the insurance company would, on behalf of the insured, handle the legal liability claim by the owner of the lower floor, take charge of the claims proceedings and engage in mediation for the insured to minimise the financial burden. Before legal liability has been established, it is most important for the insured not to personally admit any responsibility or make any promises to compensate the other party. The case should be immediately referred to the insurance company, which would not accept any privately arranged terms of compensation without its prior agreement.

Regardless of the cause of bursting or flooding resulting in property damage, the insured should cut off the water as soon as the situation has been discovered. Property should also be moved away from the flooded area to limit the extent of damage. Before clearing the affected area, it is important to first take photos or videos of the entire scene, including the location of the burst pipe, the path of the water, the damaged items and so on. The more detailed the images and videos the better. Evidence of damage should be kept, which means damaged items should not be discarded or repaired.

If the insured's property is managed by a property management company, you may obtain an incident report from them as supporting evidence for the claim. Finally, it is best to submit the claim to the insurance company within the claims period. With more comprehensive supporting documents, such as photos, videos, documents, evidence and repair invoices, the claims process would be quicker. Therefore, remember to stay calm in the event of mishaps, get the scene under control and notify the insurance company as soon as possible.

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