What is a Gradual Damage claim?

Your initio home insurance policy covers sudden, accidental damage to your home. An insurance policy is designed to help you recover from unexpected losses that can not be prevented.  It is not a maintenance contract, and is not designed to cover wear and tear.

With any insurance policy there are losses that are uninsurable. If an insurance policy covered absolutely everything, it would be unaffordable. One of these uninsurable losses is  mildew, rot, corrosion, rust or gradual deterioration.

Gradual deterioration is damage that occurs over time, and based on the above statement would not be covered by your policy. However, the initio policy includes an extension for ‘Hidden Gradual Damage’ which gives you back some cover.

What does the Hidden Gradual Damage Extension Cover?

Initio’s Hidden Gradual Damage Extension covers you for the resultant damage caused by water accidentally leaking or overflowing from an internal water pipe at your home. It is important to note it does not cover the costs to repair the leak; with our consent we will cover the cost to locate the leak. The maximum amount we will pay under this extension is $3,000 including GST.

Example of Hidden Gradual Damage

You notice that the carpet in your bedroom is wet, upon further investigation you discover that water is coming from an adjoining bathroom. A plumber removes the wall lining to locate the source of the leak, discovers a leaking pipe and repairs the leak. You lodge an insurance claim online, and a drying company (such as Jae’s) are sent to dry out the flooring. A builder is instructed to repair the hole in the wall lining, arranges for a plasterer and painter to complete the job. For the purpose of this example you have a $400 excess.

What costs are claimable?

Supplier	Amount	Description	Claimable?
Plumber’s invoice:	$700	Locating the leak	Yes, if initio have given consent
Drying invoice:	$500	Dry out flooring and wall	Yes
Builder’s invoice:	$2,000	Repair the wall, plaster & paint	Yes
TOTAL	$3,200	Total claimable costs
Plumber’s invoice:	$1,100	Repair the leaking pipe	No, not included in the cover
	$4,300	Total repair costs

So, How much will I get paid?

While the total repair costs are $4,300, the total claimable costs are $3,200. As the maximum amount payable under the Hidden Gradual Damage extension is $3,000. In this example initio will cash settle you $2,600 ($3,000 limit less your $400 excess) directly to your nominated bank account.