The Importance of Maintaining Your Buildings
How often do you think about the condition of your roof?
Many people only stop to think about the condition of their roof when storms - rain, wind and/or hail arrive. However if your roof has not been checked and maintained over time, this could be a costly experience.
An often overlooked condition/exclusion of most (if not all) property insurance policies is the underlying responsibility of the property owner or policy holder to maintain their buildings in good order and condition. Whether you own a commercial or residential property, keeping it in top shape is essential for ensuring you are covered in case of unforeseen events. In this article, we will explore why property maintenance is crucial, provide examples of how it might apply, and explain how insurers may approach claims where maintenance is found to be an issue.
As the old saying goes “an ounce of prevention is worth a pound of cure”.
Why Property Maintenance is Crucial
Maintaining your property is essential for many reasons, but from an insurance perspective, it is especially important. Insurance policies are designed to protect you from unforeseen events that can cause damage to your property or belongings. However, if your property is not maintained properly, it can become more vulnerable to damage, and insurance companies may not be willing to cover the full cost of repairs or replacement.
For example, suppose you own a commercial property that has not been maintained properly, and the roof has developed a leak. If a storm hits and causes damage to your property, the insurance company may refuse to cover the cost of repairs if they determine that the leak was caused by lack of maintenance. Similarly, if you own a residential property with outdated wiring that has not been updated, and a fire breaks out due to faulty wiring, your insurance company may refuse to cover the cost of damages.
Examples of How This Could Apply
Property maintenance conditions apply to both residential and commercial properties. Here are a few examples of how it might apply:
Plumbing: Regular plumbing maintenance is essential for preventing leaks and water damage. If you fail to maintain your pipes or clean out gutters, your insurance company may refuse to cover the cost of repairs if they determine that the damage was caused by lack of maintenance.
Roofing: Regular roof maintenance is crucial for preventing leaks and damage to your property. If you neglect your roof and it starts to leak, causing damage to your property during a storm, your insurance company may refuse to cover the cost of repairs if they determine that the leak was caused by lack of maintenance.
Electrical: Old or poorly maintained electrical wiring can be a significant fire hazard. Regular electrical maintenance can prevent fires and keep your property safe. If a fire breaks out due to faulty wiring and your insurance company determines that it was caused by lack of maintenance, they may refuse to cover the cost of damages.
How Insurers May Reduce Payouts
Insurance companies have the right to investigate claims and determine if they will cover the cost of damages. If they determine that the damage was caused by lack of maintenance, they may reduce payouts or potentially not cover events. Here are a few examples of how insurers may respond:
Refusing to Cover: If your insurance company determines that the damage to your property was caused by lack of maintenance, they may refuse to cover the cost of repairs or replacement.
Reducing Payouts: If your insurance company determines that the damage was partially caused by lack of maintenance, they may reduce the payout for the claim.
Claims Delayed: Until such time as the required maintenance has been attended to.
Increasing Premiums: If you file a claim for damages caused by lack of maintenance, your insurance company may increase your premiums or even cancel your policy.
In our recent experience working on many storm/water damage claims from early 2022, insurers have refused to make repairs to damaged property (resultant damage) until necessary maintenance has been undertaken. This maintenance will be at the policyholders expense - and rectification will almost always cost a lot more than preventative maintenance.
Conclusion
Maintaining your property in good order and condition is vital and reduces the likelihood of a claim occurring in the first place. Claims on well maintained properties usually get settled much more quickly, plus saves the policy holder from being in the awkward position of having damage unrepaired and further damage from subsequent events.
If you want to know more about how to maintain your property effectively please get in touch with us!
General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.
