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Case Review: Insurance
Summary of some of the decisions made by the Mediators on some of the complaints received by FMB.
This summary is for information only and should not be used for other purpose.
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IMB/3763 - Whether Damage was due to 'Flood' as defined in the Policy
The insured submitted a claim for indemnity for the damages to the lift of the insured premises. The adjusters reported that during their site survey they noted that the lift pit was flooded with about 1 ft of water. Inspection conducted within the lift pit did not reveal the presence of any water pipes or apparatus which would have caused or contributed to the flooding. It was reported that there was constant heavy downpour encountered within the vicinity of the risk premises.
From their inspection the adjusters were of the opinion that during heavy downpour strong wind had blown rain water to the walkway at the basement following which water flowed into the lift pit via openings in between the lift car and the lift's building door at the lift lobby area.
The insurers declined the claim on the ground that "damages to the insured property was not directly due to flood. It was actually due to accumulation of rain water originating from outside the building which flowed into the lift pit over a period of time".
The policy defines 'Flood' as follows:-
"Flood, for the purpose of this extension, shall mean the overflowing or deviation from their normal channels of either natural or artificial water courses, bursting or overflowing of public water mains and any other flow or accumulation of water originating from outside the building insured…"
If the cause of the damage was due to rain water blown by strong wind onto the walkway of the basement which then flowed into the lift pit over a period of time, it could be said that the damage was due to "flow or accumulation of water originating from outside the building insured".
Upon being queried the insurers conceded that the damage to the property was due to flood as defined in the policy and settled the claim.
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