Business clinic: Insurer won’t pay for burst pipe water damage

Farmers Weekly’s business expert Nigel Wellings gives advice on making sure your unoccupied properties are properly insured.

Q: We have recently had a water pipe burst in a farm cottage that has been vacant for a couple of months. The water has caused extensive damage to a ceiling and internal decorations but our insurer has turned down the claim. Why is this and how do I protect against it in the future?

A: Most household insurance policies, whether they are standalone policies or part of a farm combined package insurance, will have a clause in the policy wording that gives a much lower level of cover once a property becomes unoccupied.  

Nigel Wellings
Founder director
Farmers and Mercantile

The definition of unoccupied varies with different insurers but usually revolves around the property not being lived in for a period in excess of between 28 and 60 days.

See also: Accident and injury – will insurance pay for extra labour?

Once this period has exceeded, various normal insurance risks such as burst pipes, water damage, theft and vandalism are excluded from cover. Insurers’ claims statistics prove that the risk of a claim multiplies greatly once a property becomes unoccupied.

However, if you discuss the potential of a property being unoccupied with your insurance broker it is often possible to reach a compromise with insurers where some or all of the cover that would normally lapse is left in place.

For instance, if the heating is left on at a lower level and the property is visited and checked regularly then cover may be reinstated. Another option is to drain the water system to mitigate the risk. Holiday homes are quite often more at risk of this type of claim if their occupancy is not so high in the winter months.  

Your insurance broker should explain the insurance policy conditions with regard to such cover to you and then agreeing a strategy as to how the risk can be covered.

On a number of holiday home insurances it is a policy condition that heating is left on or the cistern drained over the winter months.

It is very much a case of explaining any potential risks such as this to your insurance adviser and the insurance cover then being tailored to match individual circumstances. It is probably fair to say that if your insurance cover has been purchased online or via a direct insurance provider then it is unlikely they will be prepared to alter terms and conditions to suit your needs.

With a specialist farm insurance provider there is a much better chance of the insurer being accommodating. Unfortunately, if the situation is not discussed beforehand, the insurers will be quite within their rights to turn down the resultant claim.

The information provided in these articles does not constitute definitive professional advice and is provided for general information purposes only.