Why 'We Don't Know What Happened' Won't Work for Accidental Damage Claims

Why "We Don't Know What Happened" Won't Work for Accidental Damage Claims

In insurance claims, particularly those involving accidental damage under building or all-risk policies, one phrase appears with alarming frequency and creates significant problems: "We don't know what happened." While this statement might seem honest or harmless on the surface, from an insurance perspective, it raises immediate red flags and often results in claim rejection.

Understanding why this matters and how to approach accidental damage claims properly can mean the difference between successful claim settlement and frustrating denial.

Defining Accidental Damage in Reality

Accidental damage cover protects property owners against sudden, unforeseen, and unintended physical damage caused by specific, identifiable incidents. Under traditional material damage or defined event policies, including accidental damage sections proved prudent for ensuring clients had broader cover encompassing occurrences not otherwise specifically defined.

Consider these typical examples of legitimate accidental damage:

A resident slips while showering, causing glass shower panels and aluminium frames to collapse, creating additional damage to tiles and fixtures. A heavy frying pan accidentally drops onto a glass stovetop, causing it to crack. A ladder falls against a bathroom basin or toilet cistern during maintenance work, breaking the fixture.

What's the common thread connecting these examples? Each involves a known, describable event that caused the damage, something that happened unexpectedly but can be clearly explained and documented.

Why Unknown Causes Create Problems

When claimants state "we don't know what happened," insurers face an impossible assessment challenge. Without information about the causative event, insurers cannot determine whether the incident was sudden or gradual, whether the damage arose from excluded causes like wear and tear, poor workmanship, maintenance deficiencies, or design defects, or whether the event was truly accidental at all.

Without this vital information, insurers cannot confidently apply accidental damage extensions or rule out policy exclusions. Claims managers must verify that nothing about the claim falls outside policy cover, an impossible task when the cause remains unknown.

All-Risk Cover Has Boundaries Too

While "All Risk" or wide cover policies sound comprehensive, they still require the loss cause to be both sudden and unexpected, with damage being physical and unintended. More importantly, these policies maintain specific exclusions that can't be ignored.

Common policy exclusions include gradual deterioration, mechanical or electrical breakdown, faulty design or construction, defective workmanship, and normal wear and tear. When no cause is provided, insurers cannot rule these exclusions out and typically must decline the claim to maintain policy integrity.

Best Practices for Trustees and Managing Agents

Implementing better oversight and investigation procedures significantly reduces problematic claims submissions. Consider these essential practices:

Verify Damage Before Submitting Claims

While verification can prove challenging, especially in occupied units, establishing clear protocols reduces unwarranted claims related to wear and tear or maintenance issues. Quick site visits by trustees or managing agents can clarify circumstances before formal claim submission.

Question Occupants and Witnesses

Always speak with anyone who might have witnessed the incident or noticed the damage initially. Ask specific, open-ended questions: Did anyone drop something? Was anyone working in the area with tools or equipment? Did anyone bump or knock the damaged item? Were contractors present recently?

These conversations often reveal crucial information that occupants didn't realise was relevant or hadn't thought to mention.

Avoid Vague Descriptions

Never submit claims with descriptions like "unknown cause" or "we just noticed it damaged." These vague statements create uncertainty and almost guarantee rejection. Even if the exact cause remains unclear, provide context and reasonable possibilities.

Provide Context When Uncertain

When you cannot determine the exact cause, provide as much contextual information as possible. For example: "The unit was unoccupied during the long weekend while the owner visited family in Ballito. Upon returning Monday evening, the owner discovered the ceramic cooktop cracked. A heavy cast-iron pot was found lying beside the stove, suggesting it may have fallen onto the cooktop, though no one was present when this occurred."

This description provides insurers with a plausible accidental cause, acknowledges the absence of witnesses, and includes relevant circumstantial evidence. It's dramatically more useful than "the cooktop is cracked, cause unknown."

Understanding Insurer Perspectives

Insurance companies operate on principles of good faith and accurate risk assessment. When policyholders pay premiums based on covering specific types of events, insurers must ensure claims genuinely fall within covered perils. Claims lacking causative information make this verification impossible.

From the insurer's perspective, unknown causes could indicate gradual damage, maintenance failures, or deliberately obscured circumstances. While most claims involve honest uncertainty rather than deception, insurers must apply consistent standards to all claims, which means requiring a reasonable explanation of causative events.

The Claims Process Benefits

Providing clear, detailed information about damage causes accelerates the entire claims process. Claims with well-documented circumstances move through assessment quickly, with adjusters able to verify cover, confirm valuations, and authorise payments without extensive investigation.

Conversely, claims lacking causative information face referral to claims management teams, extensive investigation, possible site visits by forensic experts, and eventual rejection if sufficient information cannot be obtained. This prolonged process frustrates all parties and delays resolution unnecessarily.

Summary: Accidental Damage Still Needs a Cause

The fundamental principle remains clear: accidental damage cover requires identifiable accidents. The damage might be unexpected, the timing unfortunate, and the consequences significant, but there must be a describable event that caused the loss.

Before submitting accidental damage claims, invest time in a reasonable investigation. Speak with residents, check for evidence, consider recent activities in the area, and document everything discovered. Even when absolute certainty proves elusive, providing plausible explanations supported by circumstantial evidence dramatically improves claim success rates.

Remember: insurers want to pay legitimate claims. Your job is to help them verify that claims genuinely fall within policy coverage by providing clear, honest information about what happened. The effort invested in proper claim documentation pays dividends through faster processing, higher approval rates, and better relationships with insurers over time.