The complainant submitted a claim for damage to his boundary wall which he stated had collapsed due to extreme weather conditions. The participant rejected the claim on the basis that the damage fell outside the scope of cover.
The participant appointed a loss adjuster who found that the damage was old, the wall had been leaning over for some time, and there were no signs of storm damage to the wall. The loss adjuster concluded that the proximate cause of the damage was wear and tear and gradual deterioration.
Based on the loss adjuster’s report, the insurer rejected the claim on the grounds of the following policy provision:
Houseowners Section noted in the policy wording: SUB-SECTION A – PROPERTY
PROVIDED THAT:
this Defined Event (special perils) does not cover:
- wear and tear or gradual deterioration;
The complainant argued that he had informed the participant about the cracks on the wall before the inception of the policy and the participant accepted the policy without inspecting the property.
The participant submitted photographs from Google Street View and photographs from the loss adjuster in substantiation of its stance on the claim.
The NFO considered the information submitted by both parties. The NFO compared the photographs submitted and noted that the cracks had become more extensive over time. The NFO was of the view that on a balance of probabilities it was not possible that the cracks were as a result of a single, sudden and unforeseen event.
Further, the NFO was of the view that the fact that the complainant had disclosed the cracks to the insurer at the inception of the policy did not mean that the complainant was covered for same as the purpose of a short-term/non-life insurance contract is to provide cover for a future, sudden, and unforeseen loss.
The rejection of the claim was therefore upheld.
It is important to understand that the purpose of an insurance policy is not to offer unconditional cover for any and every loss. The purpose of a short-term insurance policy is to provide cover for damage caused by a single, sudden, and unforeseen event which must be named as an insured event in the policy. An insurance policy is issued subject to terms and conditions which are set out in the policy documents. Although there is an obligation on insurers to provide policyholders at sales stage with concise information about its policy, there is also an obligation on policyholders to familiarise themselves with the terms and conditions of their policies.
Mamiki Khunou
Adjudicator – Non-life Insurance Division of NFO
