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Understanding Insurance Causation

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When making an insurance claim for property damage, one of the most important aspects to establish is the cause of the damage.

Insurers require proof and rectification of the initial cause before they will consider covering repair costs for any resultant damage. Without addressing this, any repairs could be undone by a recurring issue, leading to further damage and additional claims, higher imposed excesses or worse, no insurance at all.

What is causation in insurance?

Causation refers to the specific event or issue that has led to the insurance claim, including:

  • Water damage to kitchen cabinets caused by a burst pipe
  • Floor and wall damage caused by a leaking shower
  • Ceiling damage caused by a leaking roof
  • Building damage from a fallen tree due to strong winds
  • Fire damage caused by a lightning strike

Before an insurer assesses a claim, they require evidence that the cause of the damage has been rectified. If the cause remains unresolved, repairing the resultant damage would be ineffective, as the problem could reoccur.

Cause rectification and its importance

A cause rectification invoice serves as proof that the initial issue has been fixed. This invoice, typically provided by a qualified and licenced contractor – such as a plumber or roofer and outlines the repair work undertaken to rectify the causation. Insurers will not approve damage-related claims unless they receive documentation proving that the underlying cause has been fixed.

Maintenance vs. insurable damage

It’s important to distinguish between insurable damage and maintenance failures. Insurance provides coverage for an insurable event and not for deterioration over time.  If damage results from a lack of proper maintenance, the body corporate or owner is typically responsible for rectifying the issue at their own expense before the insurer will consider covering related damages.

For example, if a roof leaks due to worn-out silicone joints, the body corporate must arrange and pay for the roof repairs. Only then will the insurer consider covering costs for the resultant damage to ceilings, internal walls, or flooring. The same would apply if the waterproofing failed in a shower tray. The insurer will only consider covering the resultant damage when the owner has completed the causation rectification work first.

Key takeaways when making an insurance claim

    • Identify and fix the cause first – insurers require proof that the cause of the damage has been rectified.
    • Obtain a causation rectification invoice – this document confirms that necessary repairs have been made.
    • Understand maintenance responsibilities – insurance typically covers damage from unexpected events, not ongoing maintenance issues.

By ensuring the cause of property damage is properly addressed before making a claim, property owners can streamline the insurance process and improve the likelihood of receiving coverage for resultant damages.

Insurance Claim Form

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