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Sunday December 05 2010

It doesn't take long for a winter wonderland to become an Arctic headache. For many of us, sub-zero temperatures mean burst pipes, broken down cars, traffic chaos, cabin fever and the odd broken leg or arm. Unless you want to kiss goodbye to tens of thousands of euro each winter, if sub-zero temperatures are now the norm here, it's time to wise up on your insurance.


The bill for a burst pipe could easily run into tens of thousands of euro. "The bill depends on how extensive the water damage is -- and how long the water ran for without being noticed," said Jim Flannery, director of the Dublin loss assessors, Balcombe's Claims Management. "We dealt with one case earlier this year where a Dublin family went away on holiday for the New Year. When they came back, they found that the water pipe in the attic had burst in several points. Every ceiling in the property had either collapsed or suffered extensive water damage. The bill for the damage came to €70,000."

If you have house insurance, you shouldn't have to worry about a four-zero bill. But if you don't have insurance, or if your insurer turns down your claim, you'll have to foot the bill yourself.

It could be a lot easier for your insurer to turn down your claim than you think. If you breach the conditions of your home insurance policy -- or if you haven't been completely upfront with your insurer, your insurer could refuse to cough up.

"A lot of owners of holiday homes or investment properties got caught out last January because they hadn't met the conditions of their policy," said Flannery. "A lot of policies exclude cover for water damage when a property is unoccupied for more than 30 days."

If an insurer agrees to cover a property that is unoccupied for longer than a month, it will usually only do so under certain conditions. You may have to empty the water tank and turn off the water and electricity during the winter months. You may also have to leave the heating on a timer. If you're insuring your holiday home with FBD, for example, you must drain the water tanks in the property between November and February -- or set the central heating system to operate automatically if the temperature falls below a certain level. If you insure a holiday home with Allianz, you may have to ensure that "a responsible person is appointed to supervise and regularly check the premises".

Lying about previous claims could also land you in deep water.

"If you didn't tell your insurer about a previous claim [when buying your policy], it could cancel your policy and turn down your claim -- no matter how irrelevant that previous claim may seem," said Jonathan Hehir, director of the insurance broker, CFM Group. "If you only made a small claim of say €500 a few years ago -- but never disclosed this to your insurer, your insurer could say that had it known about that claim, it would not have insured you in the first place and on that basis, it could cancel your cover."


Even if you play by the rules, you could still have to fork out a small fortune when making an insurance claim. Over the last year, some insurers have quadrupled the excess -- the first part of a claim you have to pay yourself -- for water damage to homes. Axa has introduced a new excess of €1,000 for damage caused by the escape of water -- previously an excess of €250 was paid on such claims. FBD has increased the excess for water damage to holiday homes and investment properties from €500 to €1,000. FBD has also increased the water damage excess for residential properties from €200 to €500. Zurich Insurance increased the excess for damage caused by the escape of water or oil from €250 to €500.

"It's not unusual now for someone to pay the first €1,000 of a water damage bill when making a claim," said Hehir. "On top of that, they will lose their no-claims bonus and see their premium shoot up on renewal. They will also find it harder to shop around insurers (because they have made a claim)."


It's worth checking whether your insurer covers damage caused by snow or ice -- before buying your policy. If your house is damaged by the weight of snow on roofs or guttering, for example, not all insurers will cover this. "Any damage caused by snow is not covered as it is not an insured peril and damage caused by snow is not classified as accidental damage," said a spokesman for Allianz.

Even if your insurer covers snow damage, if your roof caves in after a snow storm, pray that it is not a felt roof as many insurers won't cover felt. For example, Axa does not cover storm damage to felt roofs over five years old "unless you can prove that the roof has been inspected by a professional builder every three years". Allianz doesn't cover storm damage "to roofs constructed with torch-on felt" that is more than 10 years old, or to roofs built with other felt that is more than five years old.

Hidden damage could also burn a hole in your pocket, particularly if you only discover it after a claim is settled. "Water can cause a lot of hidden damage, particularly in walls and under floors," said Flannery. "Wet insulation, for example, would have to be replaced. Damage like that may only manifest itself later when it's too late. It's very difficult to go back to an insurer to claim for hidden damage when a claim has already been settled and agreed."

Remember too that there are limits to what an insurer will cover. If the damage to your home is so bad that you can't live in it for a few weeks, most insurers will cover the cost of alternative accommodation for that time. Don't book your room in the Four Seasons Hotel just yet though as there is a limit to the cost of the alternative accommodation that your insurer will cover. Usually that limit is about 15 or 25 per cent of the sum you insured your house for should it have to be rebuilt in the event of fire or destruction.

If there's a water or oil leak in your home after a storm or freeze -- or indeed any other type of storm damage to your home, get in touch with your insurer first before organising repairs. Unless your insurer approves a repair job, it may refuse to cover the costs.

And remember, no matter how nippy it is out there, it could be well worth your while shovelling your driveway and pavement clear. "If a visitor injures himself because you have ice or snow in your driveway, he could claim off your house insurance if you have public liability on your policy," said John Geraghty, managing director of the online insurance broker, This may not immediately seem like an inconvenience as your insurer will foot the bill for the claim. However, chances are, you'll pay more for your house insurance when you come to renew it as your insurer will load your premium after the claim. So next time you laugh at the postman almost breaking his neck in the snow, make sure he's not in your garden.

Sunday Independent

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