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Investor's Insurance

This is always a difficult subject for a real estate office as we are not allowed to recommend any particular insurer. A recent case came to light where a flexible water hose burst in one of our investor's houses and the resulting water damage was extensive. The Tenant was home at the time, but this occurred during the evening were water was running for more than 7 hours. The Investor's insurer, one of the supposedly better ones, has tried to argue and avoid their responsibility in fixing the entire damage pre event.

As a friendly reminder, I would highly recommend you contact your insurers to make sure that you are well covered for an event such as this. Statistics have shown that this is one of their major areas of claim in recent years. It has also come to light that homes of this vintage, circa 8 years old, have been fitted with a "high rate of failure" flexible hoses that were imported from one of Asian neighbours. Remember also, if the flexible hose has been kinked during installation, at some time in the future it will fail!

As a way to lighten the subject matter, this particular owner has given permission to publish one of his letters of reply to his Insurer. 

Dear ----,

I am writing to you today to express my utter disgust at the way --- have bumbled, fumbled and stumbled through this claim. As a long term client of your company holding numerous policies I am sorry but I expect better, as a result of the current debacle I am seriously considering taking my business elsewhere.

As I live in Sydney and the damaged property is in Queensland I can only rely upon my property managers advice as to the level of damage sustained. My manager looks after multiple properties on my behalf and we have a relationship of more than ten years, so I have no reason to ever doubt the validity of any advice they provide. They employed a professional, licenced builder to provide a quotation to repair the DAMAGE AS A RESULT OF A BURST FLEXI HOSE. They did not employ a creative writer.

The damage is reported to have occurred December 25th , a quotation for repairs for the sum of $6058.80 was provided to ----- on January 6th . My property manager spoke to your assessor who told her “ I recommended going ahead with the builders’ quotation as the ---- team would be unable to do this”. Then the assessor runs back to ---- with a totally different story and your assessment is based upon this new fabrication and again I am sorry but I find it difficult to fathom the logic behind it and seriously doubt the credentials of your assessor.

1/. He recommends replacing the carcass of the vanity unit and re-using the old vanity top? Is he serious???? Surely this would be more expensive and time consuming than purchasing a new one and having it installed.

2/. Painting to 7spm walls? I don’t know what a spm wall is but if you assessor is recommending painting to water damaged walls then I would assume that there is some kind of water damage evident. Not being a rocket scientist myself if the wall was damaged by water then in my humble opinion it might make sense that the skirting boards and the bottoms of doors MAY HAVE sustained some kind of water damage and as I am not able to view the damage myself I must rely upon the builders report which stated “gyprock should be replaced as it is wet”. Your assessor wants me to paint over wet gyprock, again I must question his credentials?

3/. Your assessor found water damage to the carpeting. Surely this would also indicate that there may be water damage to gyprock, skirting and doors. Wet carpet against these materials for any length of time must have some impact to these porous materials. I note the letter received today from -------- states that “you cannot include the cost to replace carpet”. This was never asked for, so why bring it up?

Should the doors, and skirtings swell up over the next few weeks or months, and when the paint bubbles and peels off the wet gyprock what recourse do I then have with ----? Does ----- place any value upon my time or the time and amenity of my tenants?

Your assessor recommended a cash settlement of $2284, this was rejected by my property manager and a revised offer of $2654.30 was made. There was no explanation as to what this extra money was for which makes me want to ask is this Australia or China????? Why are we bartering? Again if that is the professional manner in which you guys put the “----” in ----- then I want no part of it.

By return I would like to see a much fairer assessment of this claim given the above. I would like to see a detailed statement of exactly what money ---- will pay for what item of work. I would like to see a written apology for the inept handling of this claim and I would like an assurance that in the future any claim I put in will be handled fairly, professionally and in a timely manner WITHOUT the need for me to getting involved.


This claim is still ongoing


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