The different types of water damage

Between 65-75 per cent of all of EBM RentCover’s insured event claims are for storm, flood or liquid damage each year and overall, water damage claims account for around 30 per cent of all claims. 

In fact, the top non-tenant related claims EBM RentCover receives are for liquid damage (think pipes bursting, baths overflowing, roofs leaking and sewerage discharging). And, storm damage is our most claimed insured event.

Over the past year, 1,374 claims, worth $6,469,246, were paid for storm and flood impacts. And, in the last 12 months, 930 claims were paid for liquid damage worth $2,760,541.

While some landlords think they are protected for all types of water damage, the reality is that there are some reasons it may not be covered. At EBM RentCover, we split water damage into two main areas – liquid damage, and storm damage. We break it down for you…

Liquid damage – covered in EBM RentCover policies

Sometimes water damage occurs out of nowhere and can cause significant damage and even more frustration. If you have the right insurance in place, you do not need to drown your sorrows when a property is inundated with water.

EBM RentCover landlord insurance policies offer cover for water damage cause by:

• bursting pipes;
• overflowing basins or baths (must be fixed in place);
• roofs leaking;
• sewerage discharging;
• water suddenly escaping from a waterbed or aquarium.

Case in point: Burst pipe – $54k 

A water pipe burst under the bathroom vanity. As the rental was vacant at the time, the damage wasn’t discovered until a neighbour noticed water coming out of the property and called the landlord. Most of the home was inundated with water and the flooring, skirting boards, doors and vanities all had to be replaced, at a cost of $54,500.

Storm damage – covered in EBM RentCover policies

Storm cover is automatically included in most of EBM RentCover’s landlord insurance policies. And, all of our clients have the same level of cover at an affordable price, regardless of the location or flood-risk of the investment property. Storm includes:

• flooding caused by torrential rainfall;
• cyclone or hurricane;
• rain which may be accompanied by snow, sleet and hail.

Case in point: Storm – $195k

Excessive rain and high winds caused two large gum trees to fall onto the roof of the investment property. The gaping hole allowed water to pour into the property and a tarpaulin couldn’t be erected to cover the roof until a crane removed the trees. While the roof was exposed, extensive damage was caused by rain entering the premises. The cost to repair the damage topped $195,000 and included loss of rent as the tenant had to vacate the house because of the extensive damage.

Did you know??...  We had more than 100 clients impacted by the devastating Townsville floods in February 2019. As of September 2020, we have paid out more than $2.7 million to clients impacted by this weather event.

Gradual leaking over time – NOT covered in EBM RentCover policies

Most insurers do not cover water damage which has occurred gradually over time e.g. mould, or corrosion.

This is because it is something that could have been prevented and most landlord insurance policies state that all must be done to prevent future damage and loss.

So, it is important landlords and agents conduct regular inspections (or hire qualified professionals) to ensure all plumbing is working correctly and there is no leaking of apparatuses. If a landlord or agent fails to do so, it could mean the difference between a claim being paid out or not.

At EBM RentCover, we know that it can be difficult to navigate the maze of insurance jargon and determine what exactly you are covered for. If you have any questions about cover or claims, please feel free to call the EBM RentCover team on 1800 661 662.

*While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you need us we are here, contact 1800 661 662 if you have any questions.