Who Pays for Leak Detection: The Insurer or You?

Somebody has to pay to find a hidden leak, and the answer to who is almost never a flat yes or no. It is decided by a sequence: whether the underlying peril responds, whether the insurer was told before anyone was instructed, whether what was done was authorised, and who the claimant actually is. Get that sequence in the right order and the cost is usually recoverable. Get it wrong at the first step and a perfectly valid claim becomes an argument about process.

This page sets out the sequence, the points at which the policyholder pays out of pocket and reclaims, what happens when a survey finds nothing, and why a buildings claim, a landlord claim and a block claim reach three different answers from identical facts.

The Short Answer, and Why It Is Conditional

On a domestic buildings policy, the cost of finding a concealed leak is usually recoverable under the trace and access extension attached to the escape of water peril, subject to that extension's limit and to the policy excess. That is the general position and it holds most of the time.

It stops holding in four situations, and all four are common enough to plan around.

• The underlying peril does not respond. Trace and access is an extension, not a standalone cover, so if escape of water fails then the detection cost fails with it. Water entering from outside, or passing failed sealant or grout rather than leaving the plumbing system, are the usual reasons.
• Nothing had to be traced. Where the source was already visible, there is no search to fund, and a survey carried out anyway is not a recoverable cost.
• The work was done before the insurer authorised it, and the circumstances do not justify that decision.
• The property had been unoccupied beyond the period stated in the policy, which removes the peril and the extension together.

What the general position does not tell you is who writes the cheque first, which is a separate question from who ultimately bears the cost. On most claims the policyholder or the managing agent pays the detection contractor and reclaims, because contractors invoice whoever instructed them.

Notify Before You Instruct

This is the single most important step, and it is the one most often skipped by people who are, understandably, focused on stopping the water. The order that protects the cost is: stop the loss, then notify, then instruct.

Why the order matters more than the speed

Insurers decline or reduce detection costs for unauthorised work more often than for any cover reason. Notification does two things at once: it starts the claim, and it gives the insurer the chance to say whether it wants to appoint its own contractor, approve yours, or handle the loss without a survey at all. A policyholder who instructs first has removed that choice and is asking the insurer to accept a decision it was not part of.

Mitigation still comes first. Every wording requires the policyholder to take reasonable steps to prevent further damage, so isolating the supply, switching off affected electrical circuits and stopping the flow all precede the phone call. Where waiting for authority would genuinely make the damage worse, act, then notify as soon as it is practical and write down why the decision was taken at the time. A contemporaneous note carries weight that a reconstruction six weeks later does not.

What to have ready when you notify

• The policy or block policy number, and the schedule if you have it, showing the escape of water excess and the trace and access limit as separate figures.
• When the damage was first noticed, stated as a date, and how it presented.
• What has already been isolated, switched off or moved.
• Photographs taken before anything was cleaned up or opened.
• Whether the property is still habitable, and whether more than one dwelling is affected.

What the Insurer Expects to Approve

Authority is not a formality. The insurer is agreeing to a scope and a fee basis, and it wants both defined before work starts rather than described afterwards.

Claims handling is regulated, which is worth knowing when authority stalls. ICOBS 8.1 in the FCA Handbook requires insurers to handle claims promptly and fairly, to provide reasonable guidance and appropriate information on progress, not to unreasonably reject a claim, and to settle promptly once terms are agreed. Section 13A of the Insurance Act 2015 adds an implied term that sums due are paid within a reasonable time.

When You Pay and Reclaim

Paying up front and recovering afterwards is normal rather than a sign that something has gone wrong. Which route applies is worth establishing at the notification call, because it changes what has to be in writing.

Protecting a reclaim

Reclaims fail for evidential reasons far more often than for cover reasons. Keep the authority in writing even if it was given by phone, ask for a claim reference and quote it on the invoice, take the invoice split into detection, access and repair as separate lines, and keep the report. A combined invoice invites the insurer to apply the trace and access cap to the whole figure, which costs the policyholder twice over. Our guide to trace and access costs and limits explains how that cap is consumed.

Where the loss sits below the excess

Escape of water frequently carries its own excess, separate from and higher than the standard one. MORE THAN's standard home wording states an escape of water, escape of oil and freezing pipes excess of five hundred pounds, applied instead of the ordinary excess for those perils. Where the whole loss is likely to sit under that figure, there is no recovery to be had and the detection cost is simply a private one. It is still worth notifying, because a leak that looks contained can turn out not to be, and a late notification is harder to run than an early one that came to nothing.

What Happens If No Leak Is Found

A survey that finds nothing is not a failed survey. Eliminating the supply, the heating circuit and the waste system is a result, because it redirects the investigation towards condensation, penetrating damp, a roof or a defect in another demise, all of which are handled entirely differently. Insurers understand this, and a report that records what each method ruled out is generally recoverable on the same basis as one that names a pipe.

Commercially, the position depends on the terms under which the survey was instructed. Some detection work is offered on a no find, no fee basis and some is not, and the two are priced differently for obvious reasons. What matters is that the basis is agreed in writing before attendance, including what counts as a find and what happens if access on the day is inadequate. Our guide to no find, no fee leak detection sets out where that model works and where it does not.

Where nothing is found and damp persists, the next question is usually whether the problem is a leak at all. A negative detection result that is properly recorded is the cheapest way to answer it, and our guide to telling damp from a leak covers the distinction.

Buildings, Landlord and Block Claims Reach Different Answers

Identical facts produce three different outcomes depending on who holds the policy and what the lease says. The first question on any flat is not what is covered but who is entitled to claim.

The demise decides the claimant

In a block, the buildings insurance is normally arranged by the freeholder or managing agent, so the trace and access limit that governs the work sits in a document the leaseholder has usually never seen. Whether the leaseholder can claim on it at all depends on where the pipe is, and that is a question about the lease rather than about the policy. A pipe serving one flat only, inside that flat's demise, generally belongs to the leaseholder. A riser or a run within the structure generally does not.

The regulatory position here has moved. The Financial Ombudsman Service guidance on multiple occupancy buildings insurance records that the Financial Conduct Authority amended its rules in December 2023, and that for policies sold or renewed after 31 December 2023 both freeholders and leaseholders can bring complaints about the sale or renewal of a policy, the information provided, and a claim for damage to any part of the property they are responsible for. Before that date, a leaseholder's complaint rights were narrower. If a managing agent tells a leaseholder they have no standing, that is worth checking against the renewal date.

Who pays for the damage, as opposed to who pays to find the leak, is a different question again and is covered in our guide to a leak from the flat above.

If the Insurer Refuses to Pay the Detection Cost

Refusals divide into cover reasons and process reasons, and the answer differs.

Cover refusals

Where the insurer says the peril does not respond, the argument is about the peril and not about the survey. If the reason given is that the damage was gradual, the ombudsman's guidance on gradual damage indicates it will normally expect payment where the damage was caused by an insured event, the policyholder could not reasonably have been aware of it because it was concealed, and they acted as soon as they reasonably could. If the reason is unoccupancy, the guidance on unoccupied properties is directly relevant: where a policy does not define unoccupied clearly, the ombudsman interprets the term by its natural and ordinary meaning and usually adopts the meaning most favourable to the customer, and it does not regard it as good industry practice to reject a claim where the breach was only technical and unconnected to the circumstances of the loss.

Process refusals

Where the objection is that work was unauthorised, bundled or unevidenced, the fix is documentary. Produce the written authority, the split invoice and the report. Where there was no authority because the situation was urgent, produce the contemporaneous record of why. Complain to the insurer, ask for a final response, and escalate to the ombudsman if the answer is unsatisfactory or eight weeks pass.

We are a detection and reporting contractor. We do not act for insurers, we do not advise on cover, and we are not regulated to do so. Questions about what a policy should pay belong with a broker, a loss assessor acting for the policyholder, or the ombudsman. What we provide is a located source and a report that will stand up, which is described on our insurance leak claims page.