Case Study: Proving Sudden Failure — A Waterproofing Claim Nearly Dismissed
CASE STUDIES
During ongoing home renovations, the insured discovered a leak in their tiled walk-in shower. The insurer initially labelled the issue as Hidden Gradual Damage (HGD) based on images and brief descriptions. However, through a detailed, evidence-based review, we had the decision overturned — resulting in a fair settlement of approximately $20,000 to cover all sudden and accidental damage (excluding the membrane itself), allowing the insured to proceed with their renovation plans.
Background
The insured was mid-renovation on a multi-level mid-century home when they discovered a sudden leak from their fully tiled walk-in shower. Although the current homeowner had not renovated the bathroom themselves, it had been retiled by a previous owner within the last decade — prior to the insured purchasing the property.
Upon reviewing online property listings and prior condition reports, we estimated that the bathroom had been updated approximately 6–7 years ago. The insured had owned the home for two years without any issues, and the shower had functioned normally until the day the leak was discovered.
Upon noticing the leak, the insured immediately stopped using the shower and lodged a claim with their insurer.
The Problem
Despite the insured acting promptly, the insurer formed an early conclusion that the leak was the result of Hidden Gradual Damage — without visiting the site. This judgment was based only on photographs and the policyholder’s description, putting the claim at risk of full denial.
Our Investigation
We were engaged to conduct an independent insurance assessment, during which we:
Performed spray testing, thermal imaging, and moisture readings
Investigated surrounding construction materials and bathroom structure
Cross-referenced prior renovation timelines with the insurer’s policy criteria
Assessed for visible indicators of long-term damage (none were found)
Key Findings:
No rot, mould, or discolouration to timber above or below the bathroom floor
No prior signs of wear, staining, or maintenance neglect
Immediate cessation of use upon discovery — preventing further spread
Moisture patterns and testing clearly showed a sudden point of failure
How We Made the Difference
We submitted a comprehensive report with:
Evidence supporting a sudden membrane failure, not gradual damage
Analysis of water spread patterns consistent with recent failure
Clarification that although the bathroom had been retiled, the failure was premature and not linked to poor maintenance or wear
Policy language interpretation reinforcing coverage for sudden and accidental damage
Outcome
HGD decision overturned
Waterproofing membrane replacement excluded, as expected
All resultant water damage approved under the policy
Cash settlement of approx. $20,000
Insured used their existing renovation team to carry out repairs efficiently
Why This Matters
Without advocacy, the homeowner likely would have faced a declined claim. This case shows that even when a surface-level judgment appears valid, the reality can be much more nuanced — and policyholders deserve the right to a fair and complete investigation.
Learn more about Sudden vs gradual damage here
