The Bursting of water tank caused damaged to property

The Bursting of water tank caused damaged to property. Do we still remember Condo pool’s glass panels crash to the ground? Fortunately, there were no reports of injury.

Nowadays, finding a water tank on the rooftop is quite common in our home and commercial building. A case I recalled vividly in 1995. A greenhorn in general insurance except for marine insurance which I acquired during 6 years with Robert Kouk dealing with Ship Chattering for both import and export shipment.

A Greenhorn

After a few months on the job training, I closed fire insurance on a double-floor shop retailer doing trading and also, repair sewing machine. On the second year of renewal, the insured called me his machinery had damaged by the bursting of the water tank on the top floor. A crack in the cement ceiling, water gushing down from the roof-top, damaged some of the new and old machinery.

Painful Mistake

Naively I consoled confidently to the insured. “Sure you can claim under the commercial fire to your plant and machinery.” Subsequently, I informed my branch manager about the scenario.

“Sorry, Mr. James, you could not claim a single cent for the water damaged to your machinery.” My branch manager informed the insured the outcome result after checking the policy jacket. I walked off silently, ashaming to face the insured. I learned a painful lesson.

After the incident, I signed up the former Australian Insurance Institute course for self-study. Realizing that I lacked the product knowledge to handle such situation.

Pet Shop

A few years back, there was a case in the state Johor Malaysia, whereby the pet shop was burnt down by fire.  The animal either died of suffocation or burnt to charcoal black. The fire brigade sprayed water to put off the fire. An air-condition dealer on the next door found out that all new and repair air-conditioned had been damaged by the water. The owner lodged a claim report for the damaged to his machinery and his stock.

Smiling pet shop owner was laughing all his way to the bank after receiving the full claim. But he regretted not listening to the agent to buy a loss of profit or consequential loss of profit insurance.

No Claim

The gloomy faced air-conditioned owner cursed himself to save a penny, in the end, he lost an arm. Saving a small amount of money, he lost 200 000 dollars on the stock and wiring damaged. A stubborn businessman did not want the extension peril of Bursting of the water tank when entering into the contract of insurance.

Let say the sum insured be 500 000 dollars. The Rate was merely 0.005%.  He saved 25 dollars but in the end lost Rm 200 000, indeed dug his own grave, There is an excess of 100 dollars. Thus, the final claim would be 199 900 dollars.

Bursting and/ or overflowing of Water Tanks, Apparatus, and Pipes

The policy covers damages caused to the insured property by water or otherwise due to overflowing of water into the tanks by accident or bursting of the water tanks, water pipes or other apparatus like facility water purifiers.

It is advisable to cover commercial building or house fire insurance with the bursting of the water tank. It is an automatic cover for house owner policy. It is not worth to save such a small sum of premium, but in the end, losing an arm and leg like the air-conditioner dealer. It is my advice to those insureds don’t be so calculating and stingy.

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