At Risksmart, we see many instances where the Insured’s unintended failure to meet the General Conditions of their Property Insurance policy means their claim is declined. To help avoid this situation, this article explains what some of these General Conditions in the policy wording are and steps through a case study to show how failure to meet Insurance General Conditions could affect a claim outcome.



When taking out an insurance policy it is important to understand what you are covered for, but also to check what your responsibilities are as an Insured person under the policy.

A Property Insurance policy is a mutual agreement between the Insurer and the Insured Person to protect their property. This means an Insurer expects that you will meet your responsibilities under their policy. Some examples of an Insureds’ Responsibilities which could affect the policy or claim outcome include:

Late notification of an insurance claim

Most Insurance Policy Wordings will have a general condition that an Insured Person must notify the Insurer of a claim as soon as possible. If a delay has occurred in notifying an Insurer of a claim, additional increases in costs or damage may not be covered by the Insurer.

Take all reasonable precautions to prevent loss or damage

When a sudden unexpected event occurs (e.g., a burst pipe), an Insured Person or their Representative is required to take immediate steps to put a stop to this situation.

In some situations, taking a proactive approach to maintenance means you may be able to prevent or minimise damage.


Case Study: How a claim decision can be affected by an Insured’s delayed action

An Insured Property is occupied by a tenant. The Lot Owner (the Insured Person) has appointed a Property Manager to complete routine inspections. During a routine inspection, mould was noticed in the lounge room (a non-wet area). The routine inspection reports were sent to the Lot Owner every six months; however, no action was taken by the Lot Owner to investigate the underlying cause. After multiple inspections, the tenant issued a notice of intention to vacate due to safety concerns relating to the mould growth.

If the Lot Owner lodges an insurance claim for the water damage and the Insurer asks to view earlier condition reports to check if this has been a long-term problem, the Insurer may consider reducing any potential settlement amount if there is evidence it began as a minor problem which developed into a larger issue, resulting in thousands of dollars for the mould remediation and rent loss.


If you have any questions about what your responsibilities are, we recommend you always refer to your Product Disclosure Statement (PDS) and contact the Insurer or your broker to discuss this further.


Clarissa Reyden

Claims Executive


Leave a comment

Get a Free Quote Today!