Other pitfalls to be wary of in home and contents insurance – damage by vermin

Last week I posted 3 blogs about traps in home and contents policies.

The posts generated so much interest, that I decided to blog further on traps in insurance policies.  Back in 1987 when the ISR policy was developed, the senior underwriters, brokers and claims experts who drafted the policy demonstrated a real social responsibility by working out ways to provide a full cover for the Insured.

Today, however, the opposite seems to be true, with many insurance policies stripping out cover which was previously provided, which often results in Insureds realising too late that their policy does not respond to a fire claim, the most basic of all property insurance perils. It is often the aged or socially disadvantaged who are the victims of these policies.

Traditionally, fire and home and content policies excluded damage by vermin. Vermin means:
“Vermin: 1. noxious, troublesome or objectionable animals, collectively, especially troublesome or disgusting insects or other minute animals, more particularly creeping ones parasitic on living animals or plants. 2. animals which prey on crops and livestock especially rabbits and dingoes.”[1]

An example of such damage would be, say, a mouse or rat eating an electrical wire. The damage to the wiring would be excluded but under traditional policies, any resultant damage to the building, from say a short circuit resulting in a catastrophic fire, would be covered.

Home and/or contents policies now have a blanket exclusion in both their fire and perils and full “Accidental Damage” policies.

I include one such exclusion in a policy alleged to be designed to protect the seniors in our society. I consider that putting this sort of non-cover in the market borders on abuse of the aged.













As I explained last week, the opening words of the exclusion against which I have placed the number 1 reads: “You are not covered under this policy for damage, loss or liability caused by, arising from or involving any of the following.” The use of such words creates a much wider exclusion than does the test for proximate cause. The words mean that, even if the excluded perils are the remote cause of the loss, there is no cover afforded by the Policy. In other words, it wipes out any and all cover for all losses arising, caused by, arising from or caused by insects, vermin, and birds.

Ibid., p.2086.

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