Loss of function sees rejected claim overturned

Buildings insurance Insurance

A claim was rejected, on the grounds of gradual damage exclusion, but our investigation found the cause to be accidental.

What happened

Chloe noticed the water wasn’t draining away from her house as quickly as it used to and got in touch with her insurer. They sent a drainage company to inspect the pipework.

Their report said there was a partial blockage in the pipework and didn’t mention any other problems. The insurer said this meant the claim wasn’t covered because there was no physical damage to the pipework. It said the drainage was still serviceable because the blockage wasn’t completely stopping water from flowing down. It also said the blockage would have happened gradually, and gradual damage wasn’t covered.

Chloe felt her insurer had unreasonably declined her claim, so she complained. Unhappy with its final response, she approached our service. 

What we said

We spoke to Chloe about what had happened. She said she hadn’t been aware of any problem until a few days before she made the claim. Initially, she thought the problem could be solved by putting some sink unblocker down the pipe, but when that didn’t work, she called her insurer.

The policy said it covered accidental damage to underground pipes. It didn’t define 'accidental damage', so we thought the insurer should use the usual definition of 'accidental'. We consider this to be ‘unforeseen and unintentional damage’.

We considered the blockage to be accidental damage according to that meaning, because we didn’t think Chloe would have expected, or foreseen, the problem. Although there was no indication of physical damage to the pipe, we noted the policy didn’t require any physical damage for the problem to be covered. And, as the water wasn’t draining away as it should have done, we thought there was a loss of function, therefore damage.

The policy contained an exclusion which said "we don’t cover any damage which is gradual".

We thought it was possible the material which caused the blockage had built up over time. However, although the build-up of material was gradual, the damage – that is, the loss of function – wasn’t. Therefore, the gradual damage exclusion couldn’t be fairly applied.

We were satisfied that Chloe wouldn’t have been aware of the blockage until there was a noticeable loss of function. So we weren’t satisfied the damage was gradual and didn’t think it was fair for the insurer to decline the claim based on the exclusion.