Recently, one of our clients experienced a devastating incident when part of her home caught fire due to an unattended candle that was left burning while she was out of the house for a few hours. Naturally, she sought to claim the damages through her home insurance policy with Singlife, hoping to cover the costs of the necessary repairs and restoration.
Unfortunately, the claim was denied by Singlife, leaving her not only with the emotional distress of the fire but also the financial burden of repairs. So, what went wrong? Was the insurer right to deny the claim? And why did the client still receive a restoration quotation?
Why Was the Claim Denied?
According to Singlife’s policy wordings, certain exclusions apply when it comes to “deliberate, malicious, or willful acts or gross negligence” on the part of the policyholder or anyone legally residing in the home. Leaving an unattended candle burning for hours while away from the house may be interpreted as a negligent act. Under the policy, this could potentially qualify as an act of “gross negligence,” which gives the insurer grounds to reject the claim.
Additionally, the policy typically does not cover mysterious disappearance, unexplained loss, or damage caused by poor judgment such as leaving hazardous objects unattended. Based on these wordings, Singlife may have deemed the client’s actions as negligent, thus making the claim inadmissible under their policy.
Was the Insurer Right?
From a legal and policy standpoint, the insurer appears to have acted within the scope of their policy exclusions. If the act of leaving an unattended candle is classified as negligence, Singlife is entitled to decline the claim based on the definitions of negligence and exclusions present in their policy.
That said, the client could argue that the wording of “gross negligence” is somewhat subjective and open to interpretation. Still, most insurance companies have similar exclusions for situations where the policyholder’s actions directly contribute to the cause of damage, especially where fire hazards are involved.
The Confusion: Why Was a Restoration Quotation Sent?
The puzzling part of this situation is that despite the impending denial of the claim, the client received a restoration quotation from the insurer. This might have caused confusion, giving the impression that the insurer was moving forward with the claim.
It’s possible that the restoration quotation was sent as part of a standard process initiated after an initial inquiry or submission of documents. In many cases, insurers gather repair or restoration quotes to assess the claim’s validity before deciding whether to approve or reject it. However, sending such a quote could lead the client to believe that the claim was progressing when, in fact, it was being assessed under the exclusion clauses. Better communication could have clarified the process and managed expectations earlier on.
The Takeaway
This situation serves as a reminder to always review the fine print of your insurance policy and understand what’s covered—and what’s not. While it’s frustrating for our client to face such a setback, the insurer’s decision seems to be in line with their policy exclusions regarding negligence.
However, this case also highlights the importance of clear communication from insurers to prevent confusion. Sending a restoration quotation might have given the client false hope, and such actions should be explained thoroughly to avoid misunderstandings.
Why should anyone then buy home insurance at all? After all, many accidents happen because of simple forgetfulness—leaving a stove on, forgetting to blow out a candle, or neglecting to lock the door. If insurers routinely deny claims on the basis of negligence, what value does the policy provide? Let’s break it down.
1. Negligence and Home Insurance: A Broader Perspective
Negligence is a tricky concept in insurance. While policies, including those offered by Singlife, may exclude coverage for damage caused by gross negligence or willful acts, this doesn’t mean every mistake will automatically lead to a claim denial. There’s a difference between ordinary carelessness and gross negligence. In the case of the unattended candle fire, Singlife likely considered it gross negligence because of the significant risk involved.
However, it’s important to note that not all insurers interpret negligence in the same way. Many home insurance policies will still cover a wide range of damages, even if they are accidental or caused by human error, as long as it doesn’t fall under “gross negligence.” The specifics of how negligence is defined and treated can vary across insurers.
2. Is It Only Singlife?
Singlife’s definition of negligence is fairly common across many insurance companies, both in Singapore and globally. Most policies contain exclusions for willful misconduct or gross negligence. However, how strictly these exclusions are applied can vary. Some insurers may offer more leniency in interpreting what qualifies as gross negligence, while others may apply it strictly.
This is why it’s important for consumers to read and understand the exclusions section of their policy and ask questions. When buying home insurance, you should always:
- Enquire how the insurer defines negligence.
- Ask what kinds of scenarios are excluded from coverage.
- Clarify the process of handling claims related to accidents caused by forgetfulness or minor human errors.
By doing this, you can ensure you’re purchasing a policy that aligns with your expectations of protection.
3. Why Home Insurance Still Matters
Despite the risk of claims being denied for negligence, home insurance policies offer a vital safety net for a wide range of incidents that could be devastating if left uncovered:
- Fire or Smoke Damage: Caused by external factors like lightning or electrical faults.
- Natural Disasters: Floods, storms, or earthquakes (depending on policy coverage).
- Theft and Vandalism: In cases where there’s forced entry or malicious acts.
- Accidental Damage: Many policies cover accidental damage to property, furniture, and valuables (not due to negligence).
- Third-party Liability: Protects you if someone is injured on your property and you are found legally liable.
Even with potential exclusions, a well-chosen home insurance policy can protect you from enormous financial losses in the event of fire, theft, or major disasters that are beyond your control.
4. What to Look for When Choosing a Policy
When comparing home insurance policies, it’s important to:
- Check the Exclusions: Look for policies that provide more comprehensive coverage and have less stringent negligence exclusions.
- Optional Riders: Some insurers may offer riders that cover more specific types of damage or even provide some leniency for accidents that could be considered negligent.
- Claims History: Ask insurers how often they deny claims based on negligence, and find out if they offer examples or case studies to show when claims are successful.
- Reputation & Reviews: Look at customer reviews and case studies for insights into how insurers treat claims in practice.
- Always review your home insurance policy carefully. Make sure your coverage includes essential clauses like Removal of Debris. This clause is critical in helping you clean up and restore your home after an accident or disaster. Without it, you might face significant costs to clear debris and begin repairs. (Because the policy might cover your renovation costs, but the debris & soot removal can incur cost up to SGD10K!)
Don’t wait until it’s too late—check your policy today and ensure you’re fully protected.
Conclusion
While Singlife’s decision to deny the claim based on negligence aligns with their policy, this doesn’t mean home insurance is without value. It’s about finding the right policy that fits your needs and understanding the terms and exclusions before you buy. Each insurer has their own approach, and by asking the right questions, you can ensure you’re fully protected, even in cases where accidents occur due to forgetfulness.
In the end, the purpose of home insurance is to protect you from unforeseen circumstances—just be sure you’re informed about what those circumstances are!