Insurance claim denied for water damaged bathroom

Discussion in 'Property Management' started by Hanison, 4th Dec, 2016.

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  1. Hanison

    Hanison Well-Known Member

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    Seeking advice on a situation that arose this week where by my insurance claim for a water damaged bathroom has been denied.

    Citing - Damage would have been visible for longer than 3 months prior.

    History - 6.5 year old property that has been managed by third party for duration without any issues.
    Tenant advised property manager 6 weeks ago that main bathroom had water leaking problem.
    I acted immediately to begin rectification process.

    First call was to QBCC and then builder to be told that I had missed the builders warranty ( 6 years 3 months ) by 1 week.

    Second call was to house and contents insurance provider who sent out appropriate assessors to assess damage and begin claim process. Water proofing membrane was found to have failed and water has been pooling and escaping underneath tiling.

    Assessor has cited that damage would have been viable for longer than 3 months prior and that it is maintenance issue with which I am now in the position of having to demolish and replace an entire main bathroom at my own cost. Likely 10k - 20k.

    Has anyone seen a situation like this before. Essentially new property, always maintained, third party managed, house and contents and landlord insurance.

    I am finding it absurd that with all the measures I have in place that this problem is going to cost me out of my own pocket. I have not even seen the property personally for 4 years and have been relying on property managers reports and photos ( which have always been satisfactory ).

    Thanks.
     
  2. Joynz

    Joynz Well-Known Member

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    When was the last property inspection?

    Does the insurance co have a dispute resolution process?

    Will your tenant and PM back you up/provide evidence? Did the tenant take photos? Are there emails from tenant to PM showing the timeline?
     
  3. vbplease

    vbplease Well-Known Member

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    That's really bad luck with the home warranty just expiring.. I read on PC recently somebody took the builder to court and won despite the home warranty expiring, might be worth exploring your options through small claims tribunal?

    How did the claims assessor substantiate the damage was known for more than 3months? Was there moulding plasterboard in an adjacent room/ceiling below?

    what damage has the water leak caused?
     
  4. D.T.

    D.T. Specialist Property Manager Business Member

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    Are you using a mainstream insurer rather than an investor specific one? These ones don't send an assessor out, they trust the PMs info.
     
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  5. Hanison

    Hanison Well-Known Member

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    Thanks to those that responded.

    The claim has been honored but not without some strings being pulled.

    My wife is an ex bank manager at this company and she had good contacts in general insurance who reversed the decision. Much to our delight.

    I'm still of the belief that its been a despicable act on their behalf to claim " ongoing maintenance issue' as reason for initial decline. When all appropriate measures have been in place and I am completely passive in the management of this.

    The property manager has had their head banged for not only this piece of incompetence but the multiple number of straws that have now broken the camels back.

    The tenants have been given notice and a part of me still wants to go around and change the locks on Christmas eve on them....

    However, I'm not interested in the 6 óclock news event there after.
     
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  6. Joynz

    Joynz Well-Known Member

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    The tenants did report the issue, so why are you so annoyed with them that you have given them notice?
     
  7. thatbum

    thatbum Well-Known Member

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    Yeah I didn't understand this either. Same about the property managers - on the facts given so far, its not clear what the PMs have done wrong either?
     
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  8. Perthguy

    Perthguy Well-Known Member

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    Ongoing unreported issue? That much damage doesn't happen in 6 weeks? Maybe the PM should have noticed the damage in a property inspection? @Hanison will be able to confirm
     
  9. Perthguy

    Perthguy Well-Known Member

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    Agreed. I am glad you got this resolved.
     
  10. JacM

    JacM VIC Buyer's Agent - Melbourne, Geelong, Ballarat Business Member

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    I'm going to vote this as being right up there as one of THE most important tips this year. :)
     
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  11. Marg4000

    Marg4000 Well-Known Member

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    We had dreadful trouble with a claim through Terri Scheer. Their Sunshine rep dealt with our PM but the figures never added up and parts of the claim that were legitimate were refused. Turned out neither was really up to speed on the finer points of the policy and conditions.

    In the end we got it all paid, but only because hubby (an ex insurance broker) took over the claim and had the knowledge to take things right through head office to find a person who agreed his calculations were correct.

    Around 7-8 years ago.
    Marg
     
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  12. vbplease

    vbplease Well-Known Member

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    For a claim that is $10-20k, you know insurer's that will take "info" from a PM that there is damage and not investigate the cause of damage? o_O Which companies do this?
     
  13. Hanison

    Hanison Well-Known Member

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    The information I was given from the assessor is that the damage would have been visible for longer than 3 months prior to the 6 weeks. The 6 weeks isn't included in that calculation. How this is calculated and proven is beyond my scope.

    So no the tenant didn't report the problem straight away.
    In fact during said time a fixed panel shower screen, which miraculously shattered by no fault of their own was replaced also.

    It also took the tenant 4 weeks to respond to phone calls or emails demanding to allow access for the assessor to enter the property.

    Why the property manager didn't issue an entry notice for such a serious issue is beyond me.

    So now you can see just a small painting of the much larger issues I've been faced with.

    The tenants are out not because of this one single problem. They have a laundry list of strange 'maintenance' issues to their name and its time I put an end to it.
     
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  14. Hanison

    Hanison Well-Known Member

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    Yes please inform me companies that so willingly hand out money with nothing more than a wink and a nod.
     
  15. Perthguy

    Perthguy Well-Known Member

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    @Hanison new PM and new tenants for you. I figured there was more going on behind the scenes which was the purpose of my post. From the information given it would appear the tenants breached their lease by not reporting problems immediately as required. I have also had tenants do this. The PM thing is just ridiculous. Time for a new PM?

    Anyway, glad you got it sorted. Sometimes insurance companies just need an extra push ;)
     
    Hanison likes this.