- Claimhouse Claim Guides
Escape Of Liquid Claims
- Insured events
Introduction
Escape of liquid is one of the most common types of home and contents insurance claims. But despite being widespread, these claims can often be misunderstood or unfairly declined. Whether your damage was caused by a burst pipe, leaking appliance, or overflowing drain, knowing your rights and how insurers assess these events can be essential.
This guide answers some frequently asked questions to help you manage an escape of liquid claim and challenge poor insurer decisions.
What is an “escape of liquid” under an insurance policy?
Many property-related policies define escape of liquid as the sudden or accidental escape of water or other liquid from a fixed system. This may include things like:
- Burst or leaking pipes
- Faulty dishwashers or washing machines
- Overflowing sinks, baths, or basins
- Blocked or broken drains
- Leaking hot water systems
- Cracked or overflowing toilets
Generally, the policy will consider if the water (or other liquid) has escaped unintentionally from a system that is supposed to contain it.
What types of damage are usually covered?
Insurers generally cover the resultant damage caused by the water. For example:
- Swollen or stained flooring
- Collapsed ceiling plaster
- Damaged cabinetry, carpet, or wall linings
- Mould or odour caused by moisture
However, policies often do not cover the cost pairing or replacing the faulty item itself (e.g. the broken pipe or appliance that caused the damage), unless specifically stated.
What exclusions apply to escape of liquid claims?
Common exclusions include:
- Gradual leaks – water damage caused over a long period may be excluded if not noticed or reported in time.
- Lack of maintenance – if damage resulted from poor upkeep or wear and tear, the insurer may reject the claim.
- Pre-existing damage – if signs of damage were visible before the event, insurers may argue it was not sudden or accidental.
- Defects in construction – some policies exclude damage caused by poor design, faulty workmanship, or building defects.
Each policy is different, so always check the definitions and exclusions carefully.
What is a “gradual leak” and how is it treated?
A gradual leak refers to water that escapes slowly over time rather than suddenly. Some policies specifically exclude damage from slow leaks. Others only exclude gradual leaks if the policyholder knew (or ought to have known) it was happening and failed to act.
How do I prove the leak was sudden and accidental?
To strengthen your claim, you might:
- Take photos and videos showing the damage and leak source
- Obtain a plumber’s report explaining what failed, when, and why
- Keep repair invoices or inspection notes
- Provide details of when you first noticed the issue and what action you took
What about damage to hidden or undamaged materials?
Even if certain materials (like tiles or cabinetry) are not damaged, insurers may still have to pay for their removal and replacement if they need to be disturbed to access the damaged area. For example:
- Removing undamaged bathroom tiles to access water-damaged wall linings
- Lifting undamaged floorboards to dry a soaked subfloor
Conclusion
Escape of liquid claims can seem simple, but many go off course when insurers rely on unclear exclusions, vague expert reports, or narrow interpretations of “gradual” damage. Others get delayed or undervalued, leaving policyholders to carry the risk or cost.
At Claimhouse, we understand how these claims are assessed behind the scenes. We’ve seen how insurers apply policy wording, how they treat evidence, and what drives unfair decisions. Whether you’re dealing with a rejected claim or a cash settlement that doesn’t stack up, we bring the strategy, experience, and pressure needed to move things forward.
Jump To
Having issues?
We commonly see these issues during an escape of liquid claim:
- Delays and Make Safe Failures – Insurer inaction can cause damage to worsen, often resulting in mould growth.
- Exclusions – Denials based on defects, wear and tear, maintenance or atmospheric conditions applied unfairly.
- Inadequate Assessments – Insurer reports often miss key damage.
- Flawed Scope – Missing or underpriced scope items, based on rushed assessments from inexperienced assessors.
- Low Cash Offers – Cash settlements are often undervalued, missing key policy benefits and compensation offers.
- Poor Repairs – Low quality, rushed repairs.
What Could I do next?
Every claim is different, but the following steps may be available to you to take with your claim:
Step 1 – Ask for a detailed explanation
Whether the claim has been unfairly declined or you’ve been given an unreasonable offer, you could ask the insurer to explain themselves. Ask for:
- A written decision/offer
- A copy of the assessment reports, scope of works and quotes they reviewed
- How the position aligns with their policy wording
Often, just getting a clear explanation helps you spot gaps, misunderstandings, or assumptions worth challenging.
Step 2 – Lodge a complaint
If their position still doesn’t sit right, escalate the matter to the insurer’s Internal Dispute Resolution (IDR) team. At this stage, it’s important to provide any further evidence you can that challenges the insurer’s own evidence.
Complaints teams will usually uphold the original offer unless you raise new points, provide new evidence or challenge the reasoning clearly.
Step 3 – Escalate to AFCA
Still not resolved? Lodge a complaint with the Australian Financial Complaints Authority (AFCA) at www.afca.org.au. AFCA is independent and free to use.
confused? over it? Want a second opinion?
If you are exhausted with the claims process or want the support of an expert claim advocate in your corner, submit an enquiry and we’ll review your claim, for free, and help you move forwards with confidence.
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Whether you need advice, support, or a second opinion, we’re here to help you understand your options and move your claim forward.
You can contact us using our enquiry form (to the right), or by calling or emailing us.
What happens Next?
Your Claim Journey Starts Here
Once you submit an enquiry, we review your claim and let you know if and how we can help. At every stage, it’s completely up to you. No commitment, just open and honest discussions about your claim and situation.
01
Review
We'll review your claim, requesting further documentation if needed, and provide you our initial thoughts.
02
Consultation
If we think we may be able to help, we'll book a call to learn more about your claim and to introduce ourselves.
03
Offer
If we still think we can help, we'll offer you one (or more) of our services appropriate to your circumstances.
04
Decision
You review our offer and decide whether you want to go ahead with our services.