If Insurance Payment Is Denied for a Leaking Kitchen

Financial Supervisory Service 'Daily Life Liability' Insurance Major Dispute Cases
Compensation Only Possible with Subscription to Water Supply and Drainage Facility Leakage Damage Special Contract

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Mr. Jang, who lives in an apartment, confirmed that water from his bathroom was leaking into the downstairs unit. He conducted acoustic and gas detection to find the leak path but could not identify a clear cause. Mr. Jang had personal liability insurance for daily life and claimed related costs as insurance benefits. However, the insurer refused to pay, citing the inability to find the cause of the leak. Mr. Jang filed a complaint with the Financial Supervisory Service and, after going through the Dispute Mediation Committee, received the insurance payout.

On the 7th, the Financial Supervisory Service disclosed major complaint cases centered on the 'personal liability insurance for daily life' special contract related to leak accident compensation. In Mr. Jang’s case, the Financial Supervisory Service’s mediation committee stated, "Actions taken to detect the cause of the leak after its occurrence, regardless of success, are considered damage prevention costs taken to eliminate the cause of the accident in a situation where additional damage may occur." Costs that help prevent or mitigate damage during leak-related repairs are compensated, but repair costs for one’s own home, such as tile work, may vary by case and should be noted carefully.

Mr. Kim conducted plumbing repairs due to a leak in his kitchen pipes and claimed insurance benefits under the personal liability insurance special contract. The insurer refused payment, stating that damage occurring in one’s own home does not establish liability. The personal liability insurance special contract compensates for legal liability to pay damages when accidental damage occurs to others’ bodies or property due to ownership, use, management, or daily life activities in the insured residence. Damage to one’s own property does not establish ‘liability to others’ and thus is not compensated. However, the 'water supply and drainage facility leakage damage special contract,' which falls under property insurance, covers repair costs for one’s own home if accidental leaks or water damage occur in insured water tanks, supply and drainage facilities, or pipes in the owned or occupied residence.

Those who own a home but rent it out should pay attention to the terms and conditions. The personal liability insurance special contract expanded its coverage in April 2020 to include not only the insured’s own residence but also residences where tenants or others permitted to live in the insured’s owned home reside. If insured under policies with terms prior to this revision, insurance payouts for damages such as leaks will not be provided.

Mr. Jeong, who lives in an apartment, believed that all damages caused by a leak from the upstairs unit’s pipes could be fully covered by insurance and commissioned repairs through a company he knew. He claimed the full repair cost from the insurer but received only partial payment, citing that the cost exceeded an appropriate level. A Financial Supervisory Service official explained, "Obtaining a repair cost estimate from the company before starting leak repairs and consulting the insurer about appropriate cost levels can reduce disputes."