Storm Damage and Insurance.
What surveyors should know
This article explores how building insurance policies generally cover financial loss caused by storm damage and considers the implications for surveyors when reporting property defects and deficiencies.
Insurance Company Considerations
When assessing a storm damage claim, the insurance company will consider three main issues:
- On the balance of the evidence, do they agree that storm conditions occurred on or around the date the damage is said to have happened?
- Is the damage claimed consistent with what is generally seen as storm damage?
- Were storm conditions the main cause of the damage? It could be that other factors were involved, and the damage might have occurred without the storm.
- To answer these questions, they will take into account weather reports, the condition of the property, and information about the storm conditions in question.
Defining a storm
How do insurers define a storm and assess the damage caused by a weather event? For example, how is storm damage differentiated from accidental damage, which may not be covered?
Building insurance policies do not necessarily define exactly what constitutes a storm. Rather, they are likely to say that a storm involves violent winds, and is usually accompanied by rain, hail or snow. However, there are circumstances where damage is caused to property by extreme weather events that do not include high winds. In these circumstances, will any damage be covered by the insurance policy?
Assessing a claim
Insurers may use the Beaufort Scale to justify whether they should meet a claim. This measurement tool categorises wind speed on a scale of 0 to 12. Insurers might say, for example, that only winds above a certain point on this scale represent ‘storm force’ winds capable of damaging a building.
When assessing a potential claim, insurers don’t rely solely on the Beaufort Scale. They will also use weather reports for the alleged storm’s timeframe to help assess the weather conditions at that time.
While the weather station may not be the exact location of the damaged property, readings can still provide useful evidence for assessing the claim. Insurers will carefully consider all the evidence in each individual case to determine whether the loss claimed by the consumer was caused by a storm, or by another type of event.
Damage caused by alleged storms
Damage to retaining walls
If a retaining wall has collapsed during a storm, insurers will consider the primary cause for the collapse. Sometimes it can be caused by a gradual build-up of pressure behind the wall. This can be further aggravated by ‘weep-holes’ becoming blocked over time, by the lack of weep-holes at all, or by incorrect mortar repairs in older walls.
Weep-holes prevent moisture from building up behind the wall. Water will look for ways to escape and weep-holes allow moisture to escape easing internal pressure and reducing the chance of the wall collapsing.
Most modern walls have weep-holes, but many older walls do not. Insurers would not consider a home owner at fault for not adding weep-holes to a wall that was built without them.
That said, if the insurer concludes that a wall has collapsed due to earth behind it becoming saturated over time, it would not be regarded as storm damage and the claim might not be honoured even if the storm event triggered the collapse. It should be noted that, this this type of damage could be covered by other parts of a buildings insurance policy.
Damage to contents due to storm damage
Claims relating to storm damage can be made under a contents insurance policy.
Following a storm, water might enter a property through gaps in the roof tiles and damage contents. A consumer might then make a claim on their buildings cover for the damage to the roof, and on their contents cover for storm damage to their contents.
In this situation, insurers will consider whether the consumer was aware of the damage to their roof. If they think that they were not aware, they might uphold the complaint relating to the contents insurance claim, but could still reject the buildings insurance claim. For example, if they think that the primary cause of the damage to the roof tiles was wear and tear, rather than the identified storm, they won’t uphold it.
Damage as a result of snow
Insurance claims for damage caused by a snow storm also occur. Snowfall might constitute a storm if high volumes fall over a relatively short period of time, and the snowfall is considered extreme.
However, damage such as collapsing roofs and conservatories, is often caused when snow falls gradually over several days and the collapse is due to the weight of snow which has built-up over that time.
Case Study 1 from the Financial Ombudsman:
The claimant’s conservatory was damaged by snow. The claim was based on the fact that the damage was caused by heavy snowfall over a period of days, which the claimant believed constituted a ‘snow storm’.
However, his insurance company rejected the claim on the basis that the damage was not covered as an insured event, such as storm damage although it did concede that the claimant could have claimed under accidental damage. Unfortunately, he had taken out this type of cover.
The Financial Ombudsman supported the Insurance company in this case. While there had been a significant amount of snow on the roof of the conservatory before the damage had occurred, they felt this was snow that had built up gradually over a period of days. Consequently, it was not a ‘one off extreme event’ that would constitute a storm.
Here, insurers will look at whether the damage is consistent with a single event such as a snow storm or is more likely related to maintenance issues.
The condition of the property
Both insurers and the Financial Ombudsman, if the case is subsequently referred to them, will also consider the condition of the property at the time the storm damage is said to have occurred.
For example, when investigating a claim for a flat roof said to have been damaged by a storm, they will decide whether the roof was in a poor state of repair before the storm. If they think this would (or should) have been clear to the consumer, then they are unlikely to uphold a complaint against the insurer for declining a claim for storm damage. Many insurance policies exclude damage caused by wear and tear. Some also exclude damage caused by gradual deterioration or gradually operating causes.
Another example would be where a consumer claimed for damage to their pitched roof following a storm – but the roof tiles already appeared to be in a poor condition before the storm. Insurers would carefully consider whether the roof tiles would have been displaced regardless of the storm – or whether they were in a good enough condition to have remained in place for some time, had it not been for the storm. If they decided that the roof tiles would have been displaced regardless of the storm, they are unlikely to settle the claim. But if they think it is likely that the tiles were in a good enough condition to have remained in place if the storm had not happened, they may settle the claim.
Sometimes, an insurer will decide there was no storm damage, or that the buildings were so poorly maintained it was reasonable for the insurer to decline a claim for storm damage. However, the consumer may still be able to claim for some of their losses under the accidental damage section of their policy, if there is one.
Accidental damage cover is usually sold as an optional add-on to standard household insurance policies. Insurers often say it is designed to insure the policyholder’s possessions against damage caused by acts of negligence, which could include spillages and breakages in the home.
Defining accidental damage
A policy should define “accidental damage”. Where it does not do so, the Financial Ombudsman will usually apply “ordinary, everyday meanings”. Generally, this will be something both unforeseen and unintentional.
They also say that a “reasonable interpretation of the word damage” includes not only physical damage to an item but also something that resulted in a “loss of function” or to put it another way, left it unable to perform the task it was designed to do. For example, a blocked drain could be considered as ‘damaged’ – even if there was no physical breakage or visible trauma, because the drain isn’t working how it should.
Some policies clearly define what they mean by ‘accidental damage’. Typically, damage must be: “sudden and as a result of an external, visible and violent cause”.
If a policy has defined accidental damage, then the Ombudsman will, in the event of a claim being referred to them, look at how the definition was communicated to that policyholder. They are likely to uphold a complaint if:
- the policy defined accidental damage as something significantly different to the ordinary meaning of the words,
- the policyholder’s attention was not adequately drawn to the unusual definition,
- the policyholder would probably have acted differently, and been in a better position as a result, if the definition had not been significantly different to the ordinary meaning.
So, if an unusual definition is mentioned solely in a policy document or in the renewal literature, this is unlikely to be considered as enough to bring it to the policyholder’s attention.
When might accidental damage apply?
Insurers might not honour a claim for damage where it is found to be caused by:
• wear and tear,
• the gradual deterioration of something with age,
• wilful or deliberate acts,
• defective workmanship.
Case Study 2 from the Financial Ombudsman
The claimant’s roof became damaged and their insurer agreed the damage had occurred following a storm. However, it refused to cover the full costs of repair because the nails securing the roof slates were worn out. This ‘wear and tear’ was excluded under the policy.
In this particular case, the Financial Ombudsman was made aware by the insurance company of a phone conversation between a representative of the insurers and the claimants. This conversation mentioned that a contractor had visited the claimant’s house and noted that the nails securing the roof slates had rusted. However, the insurer could not provide a recording of this phone conversation or written confirmation from the contractor in question.
With the insurer’s agreement, the claimants instructed a second contractor to inspect the damage to the roof. This second contractor’s report indicated that the damage to the roof had occurred because of the storm and did not mention any wear and tear contributing to the damage.
The Financial Ombudsman decided the balance of evidence suggested the cause of the damage was the storm and told the insurer to reconsider the claim and to pay any settlement due to the claimant.
What are the implications for surveyors?
We know from experience that many consumers see the surveyor as ‘the low hanging fruit’ when they are aggrieved following the purchase of a property or when they have a significant repair bill.
We are not aware, however, that any research has ever been carried out to determine how defects come to light in the first place. We know of no statistics to suggest what proportion of complaints or claims are made against surveyors because buildings or contents insurers have not met a claim.
That said, we must acknowledge that an investigation following an insurance claim is very likely to uncover any defects or deficiencies present – and this potentially implicates surveyors. If a surveyor attended that property on behalf of the new owners to undertake a buyers’ survey and failed to pick up that underlying problem, then, as we know, there is the potential for a PI claim.
As we see more extreme weather events due to climate change, claims against buildings insurance policies will increase. It therefore makes sense when inspecting a property and reporting to clients, that surveyors should consider how the elements will behave in extreme weather when determining condition ratings.
For more information on storm damage and potential repercussions for surveyors, see financial-ombudsman.org.uk