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Thread: Short term insurance clause

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    Short term insurance clause

    Sub-section A Property

    Storm, wind, water, hail or snow other than
    (a) that a rising from its undergoing any process necessarily involving the use or application of water
    (b) wear and tear or gradual deterioration
    (c) loss or damage
    (i) to retaining walls
    (ii) caused or aggravated by
    - subsidence or landslip
    - the insured's failure to take all reasonable precautions for the maintenance and safety of the property
    insured and for the minimisation of any destruction or damage.

    I have a question regarding the above clause in our short term insurance contract. One of our buildings have collapsed and we had to undertake repairs ourselves which was exuberant. The insurers refused payout as a result of us not having subsidence cover.

    What had happened is this, a pipe next to our building had burst, it was underground and not visible. It washed away the soil underneath the building and as a result the building had collapsed on the side where the water was leaking. Subsidence can be caused by water erosion, however if it is not specifically excluded then the cover of water damage would come into play and we are protected (this is according to Ombudsman).

    Our insurer claims that the above clause prevents them from paying out as a result of subsidence being caused by the water damage. My interpretation of (c)(i) and (ii) above only pertains to loss or damage to retaining walls and has nothing to do with the damage to the foundation.

    Could any other people with experience in insurance and or law shed some light?

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    I was just informed that a retaining wall is the same as foundation, you can ignore above post

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    Gold Member Houses4Rent's Avatar
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    Is it really? I did not think so.
    Houses4Rent
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    Email problem Phil Cooper's Avatar
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    Does not seem right as far as I know...

    In insurance, the doctrine of Proximate Cause applies - what this means is that Insurers look at what CAUSED the subsidence.

    Where the support is washed away by a burst pipe, the proximate cause is WATER - NOT subsidence. It would fall under the policy (I have had a number paid for my clients).

    HOWEVER - if it is a RETAINING wall - which you seem to indicate - it could well be excluded, as Boundary and retaining walls are ofter excluded from cover unless specifically specified.

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    Platinum Member sterne.law@gmail.com's Avatar
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    Subsidence is movement of land where that movement would have happened even if no building was present and the movement is downwards.
    How I read your clause, as presented, (c) deals with loss or damage to retaining walls, caused by subsidence etc.
    So only the loss to THE retaining wall. The other than phrase indicates these are the exclusion s.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Email problem Phil Cooper's Avatar
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    Agreed - damage to the Buildings should be covered.

    Retaining wall has NOTHING to do with a foundation whatsoever. A retaining wall is a wall intended to support various levels of sloping land.

    Who is the Insurer?

    I strongly feel that this should be covered, falling inside ambit of policy.

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    Quote Originally Posted by Phil Cooper View Post
    Agreed - damage to the Buildings should be covered.

    Retaining wall has NOTHING to do with a foundation whatsoever. A retaining wall is a wall intended to support various levels of sloping land.

    Who is the Insurer?

    I strongly feel that this should be covered, falling inside ambit of policy.
    ABSA, its a HOC policy, we are in process of establishing a quantum with the loss adjustors. However their initial findings was a rejection of the claim, thank you for all the input. We will keep that in mind should the case go further to Ombudsman.

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    Email problem Phil Cooper's Avatar
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    As a rule, NEVER do your homeowner's insurance through a Bondholder's insurance.

    Rather speak to your Broker, and arrange yourself.

    The covers are (nearly) always cheaper, with les restrictions and wider covers.

    The Bank CANNOT insist that you use their inhouse guys!

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