Understanding Gradual Damage and Insurance Coverage
2 October 2024
Insurance primarily aims to protect against accidental, sudden, and unforeseen events. However, insurance coverage becomes more complex regarding gradual damage, which develops over time due to wear and tear or poor maintenance.
Understanding the nuances of gradual damage and how it is treated under insurance policies can help policyholders manage expectations and avoid potential disputes.Understanding the nuances of gradual damage and how it is treated under insurance policies can help policyholders manage expectations and avoid potential disputes.
What is Gradual Damage?
Gradual damage refers to damage that occurs slowly over a period of time.
Examples include:
- Rust or corrosion from minor, unnoticed leaks.
- Rot from persistent dampness or water ingress.
- Mould growth due to prolonged exposure to moisture.
- Cracks in foundations or walls resulting from settling.
Unlike sudden damage, which is typically covered by insurance policies, gradual damage is often excluded due to the expectation that policyholders should maintain their property and address issues before they escalate.Insurance Coverage for Gradual Damage
Most insurance policies exclude coverage for gradual damage because it is seen as a result of ongoing issues that the policyholder should have managed. Insurance is designed to cover unforeseen, sudden events rather than damage that results from neglect, poor maintenance, or wear and tear from age.
Hidden Gradual Damage:
Special Coverage
Despite the general exclusion of gradual damage, some insurers offer specialised coverage for hidden gradual damage. For instance, our Star Insure Camper Care policy includes an additional benefit for “Hidden Gradual Damage.”
This benefit provides coverage of up to $2,000 to repair damage that is caused by water leaks from fixtures such as sinks, toilets, showers, or windows installed in your vehicle.
Full details on this extension can be found in our policy wording, or by speaking to a staff member in our internal assessing team.
Handling Claims
When a claim is made for gradual damage, insurers will typically:
- Investigate the damage to determine whether it was sudden or gradual.
- Review Policy Terms and assess how the policy responds based on the nature of the damage.
Prevention and Maintenance
To minimise issues with claims:
- Conduct frequent inspections of your property or vehicle to catch potential issues early.
- Address problems before they cause significant damage.
- Follow recommended maintenance practices to prevent damage from worsening.
Conclusion
Understanding the difference between sudden and gradual damage is crucial for policyholders. While most insurance policies exclude gradual damage, specialised coverages like those offered by Star Insure can provide some protection for hidden issues. Regular maintenance and prompt claim lodgements are essential to avoid complications and ensure that insurance can adequately cover sudden incidents.