The abnormality of accidental damage and cover

FAnews read an interesting claim ‘‘Damage to carpet by dog who dies of contagious disease’’ that was published on LinkedIn by Jonathan Reuter, Head of Claims at RG Ford/Bluefin, based on the issue of the terms and conditions of a policy and its exclusions.

We thought this claim would be interesting to share with our readers and also approached two insurers to get their perspective on a claim like this.

Some background

A dog contracted a very contagious disease. Due to this, its bowels emptied onto the carpet several times. It then died on the carpet causing further damage.

The vet said the carpet had to be disposed of for health reasons. This is where the issue is put under a microscope.

The home insurer has an exclusion, “we will not pay for any loss or damage caused by or resulting from, vermin, rodents or domestic pets.”

With this, Reuter says he appreciates this clause is fairly self-explanatory but he states that this is not a normal incident. “Surely the spirit of the clause is for general accidents and chewing by pets, not contagious diseases causing death. It was a sudden and unforeseen incident and not gradual damage,” he said.

The risk of exposure

When looking at a case like this, Marvin Tshezi, Head of Claims at Hollard Personal Lines says contractually the insured is not entitled to indemnity in terms of the policy as this is a specifically excluded peril.

“Although the circumstances are quite traumatic, we would need to uphold the terms and conditions of the policy herein,” he said.

“Hollard has not had such an instance, however our view is that the risk of owning a pet does expose one to chewing, biting, scratching, soiling items by vomiting, urinating and defecating in a way that humans do not. These are all the risks that we, as an insurer, do not pick up,” continued Tshezi.

Tshezi believes the policy exclusion is quite specific in that the claim in question is damage that resulted from the domestic pet falling ill, therefore there will not be cover in terms of the policy.

He concluded by saying, “legally an insurer will be within their right to reject the claim.”

Analysing the scenario

When asked if Santam would pay for a claim like this, Marius Neethling, Personal Lines Underwriting Manager at Santam said, “in terms of standard home insurance cover we would not cover the loss of or damage to the carpet in a scenario like this.”

In this scenario Neethling is of the opinion that too much emphasis is placed on ‘very contagious’ and that every (pet’s) disease should be treated as such. “We are aware of similar cases and have dealt with claims of this nature before. We once dealt with a claim where ink was accidentally dropped onto a Persian carpet and it could not be removed. The insured had accidental damage cover and we paid out the claim,” he said.

In conclusion, Neethling believes insurance claims should only be repudiated if they are supported by the insurer’s policy wording and the conditions of the insurance policy are in force.

Common ground

In the LinkedIn group discussion the views and sentiments around this topic were similar. Depending on the length of the customer relationship some members of the group feel they would proceed on an ex gratia basis due to the extenuating circumstances of the event. They feel it would only be right for a client in devastating times such as these.

The majority of the members feel the poor dog was sick but the intent of the wording is clear and the exclusion applies. Therefore, it is widely agreed upon that the exclusion allows the insurer to decline liability.