What is and isn’t hidden gradual water damage?

Gradual water damage claims are not always straightforward. This is a simple guide to explain what triggers a claim.

House insurance provides cover for sudden events (like a burst pipe), and normally excludes cover for gradual damage over time.

Many insurance policies have an exception to this under an extension for ‘hidden gradual water damage’. However, there are conditions that need to be met for cover to apply.

When can I make a Gradual Water Damage Claim?

Put simply, the damage needs to be hidden, and it needs to be caused by an internal water pipe or tank.

‘Hidden’ means that the water damage or leak is not visible. Usually this is a water pipe behind a wall or cupboard. Cover will not apply if you can see the leak, and it could have been prevented.

‘Internal pipe’ or tank is specific. This includes waste pipes, water pipes (i.e. pressure pipes), and hot water cylinders. If your leak has not come from one of these then cover will not apply.

Examples of Hidden Gradual Damage Claims:

  • Leaking kitchen sink waste pipe behind the benchtop, causing hidden water damage and mould to the kitchen cabinets.
  • Leaking pressure pipe in the wall behind the shower.  The leaking water slowly causes rot in the wall lining and floorboards.
  • The water source for a hot water cylinder fails due to a leaking valve. This runs water down the inside of wall and causes the wooden flooring below to swell.

How much cover do I get?

Some policies do not include any hidden gradual cover at all. Policies that do provide cover will have a limit which can range from $1,000 to $5,000. Your excess is then deducted from that limit.

The initio house insurance policy has a $3,000 hidden gradual damage limit.

What is not a Gradual Water Damage Claim?

Any water damage that is from an exterior or visible water leak, or one that does not come from an internal pipe/tank.

Examples that are not considered Hidden Gradual Damage Claims:

  • Leaking window frame which causes rain to leak onto the window sill.
  • Water leaking onto the floor from a faulty washing machine (unless from a hidden pipe).
  • Damage to the carpet caused by moisture from a potted plant.

What if I’m not sure what type of damage it is?

It can be hard to tell how the damage has occurred or where the leak is from. If you are unsure we recommended you get a quote from a tradesperson, and ask them to include their opinion on how the damage was caused.

Is the leaking pipe itself covered?

Insurance is designed to cover the damage that results from the leak (e.g. the wet kitchen cabinets, or damage to the wall). Insurers will also pay the costs to repair damage caused by finding and getting to the leak (e.g. repairing a wall that was cut to get to a leaking pipe).

House insurers won’t pay to fix the leaking pipe itself. The policy provides cover for the resulting damage but is not designed to fix the faulty source of the damage. The cost to repair the leaking pipe will be your responsibility, but in most cases this cost is low in the greater scheme of the loss.

Learn more about the cause of damage.

Hidden Gradual Damage Claim Example

A tenant discovers that the kitchen floor is spongy under the lino. The water supply pipe for the cold tap had been slowly dripping. Over time it caused the kitchen cabinet to swell and the particleboard to deteriorate.

The landlord lodges a claim under his initio landlord insurance policy and arranges a plumber to quote the repair costs.

We authorise the repairs and the claim is settled as follows:

Item Amount Claimable?
Sink Cabinet Panels $866 Yes
Fixing, Screws, Glues $63 Yes
Particle Board Sheet $110 Yes
Builder’s Labour $590 Yes
Relaying of Lino $783 Yes
Piping Replacement $23 Not included in cover
Plumber’s Labour $65 Not included in cover

Total Cost: $2,500

Less items not claimable:
 Repair/replacement of Broken Pipe (Piping and Labour): $88

Claimable Amount: $2,412

Less Excess: $400

Claim Payout:  $2,012

Customer pays (excess & pipe fix): $488

Initio is a specialist house insurance provider. Our online approach means that customers can get a quote in seconds, be covered in minutes and have their claims managed and paid quickly.

Learn more about our house insurance and landlord insurance.