WHERE THERE'S SMOKE THERE'S FIRE!......and the insurer may not pay!!
On the 1st May 2006 a new legislation came into force which most households may not be aware of. The NSW government enacted smoke alarm legislation for every household covering owner occupied as well as rental dwellings. There has been much speculation as to how insurers would use this new legislation against the average home owner as now that it is compulsory for every home to have a working smoke alarm, the punters are suggesting that should an alarm not be installed and/or not be operating then the insurer would have the right to avoid a claim.
Well, the jury is still out on this point but I certainly have an opinion on this matter and it is the subject of this article.
Firstly, we have to examine the insurance contract and see if there are any conditions within the contract itself that will enable the insurer to avoid paying a claim. Based on my experience in marketing householders insurance I have not yet seen a condition of its type within any insurance contract that I have picked up. Some may say that there is a duty to take all due care of the property and that not installing a smoke detector or not maintaining it would not be all due care. Well, that fact that legislation is now in place does not change “due care”, it simply changes the requirements of installation and maintenance. The legislation dictates supply, installation and maintenance and one would assume there may be a penalty for non-compliance. The real question is whether the insurer would have accepted the risk with or without the smoke alarm.
Statistics show that Smoke detectors don’t save houses……they only save lives! The insurers do not provide any discount for smoke alarms as they are in the game of insuring houses and smoke detectors save lives and not houses.
Although it is certainly NOT a recommendation from our firm not to put smoke detectors in your property as insurance can only replace your material wealth, we can not replace your most important asset……your family and your loved ones.
GENERAL ADVICE WARNING
The information provided is only based upon general advice and individual circumstances have not been taken into consideration. It is left to the discretion of the individual/s taking out the policy to ensure the policy has adequate cover to suit your needs. Eagle Insurance Brokers recommend that you read the Product Disclosure Statement carefully before you decide whether to take out any policy. |
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