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Water damage

Veronica owned a beach chalet that she rented out to holidaymakers for approximately fourteen years. As Veronica lived overseas, she left the day-to-day running of the chalet to her managers, Mr and Mrs Burns.

One day, Mrs Burns contacted Veronica with pictures of the chalet’s bathroom. The pictures showed severe water damage to the floor and to the wall around the bathroom tub.

Veronica contacted Bob to come in and replace the damaged bathroom floor, vanity and shower base. He removed the tub and found that the floor underneath had also rotted. Bob said the volume of water was so much, it had damaged the floor in the next bedroom.

As Veronica had an insurance policy that covered her for gradual hidden damage, she lodged a claim with the insurers for a reasonable portion of her costs.


The insurer declined to pay Veronica. Firstly, it said there was no evidence that the rotting floor was caused by an internal leaking water pipe. Secondly, it said that the damage was not “hidden” because it could be seen in plain sight. The insurer said only damage that was both gradual and hidden would be covered under its policy.

Veronica argued that as soon as she became aware of the water damage, she took action to have it repaired. She thought the insurer’s decision was unfair and complained to FSCL.


We reviewed Bob’s evidence, and the insurer’s observations, to determine the cause of the water damage to Veronica’s bathroom.

In our view, the bathroom floor had been damaged from water seeping in through the tub’s lining while the shower was in use. We said that the insurer was not liable to pay for the damage because it was an internal leak and fell outside the policy terms.

However, we did find evidence of an internal leaking water pipe that had caused damage to bathroom wall. We asked the insurer to pay Veronica for the costs of repairing the wall.


The insurer agreed with our decision and paid for half the repair costs. Veronica accepted this in full settlement of her complaint.


It is the insured’s responsibility to ensure regular inspection and maintenance of their property so that any damage can be attended to quickly.

When there is a dispute in the facts, it is helpful to have an independent review of the evidence. In this case, the damage was caused by two different leaks. The insurer should have given fair consideration to all the evidence and paid Veronica for a portion of her costs.