February 11, 2022

When was the last time you took a look at your home’s water pipes? If you’re like us, it’s probably been a while. However, believe it or not, water damage has become the second most common type of insurance claim after wind and hail damage. According to recent data from major insurers, one in fifty insured property structures will submit a water-related incident each year. 

The most common causes for water damage claims in residential homes come on account of appliance failures, burst pipes after power failure, plumbing leaks, and sewer back-up. For business owners, it’s also worth noting that since 2013 it’s been found that commercial buildings are six times more likely to be damaged by water versus theft, and water damage is seven times more likely to occur than fire. 

If this is news to you, it may be worth giving your commercial property or homeowners insurance policies another look to see if you have adequate coverage. The fact of the matter is that some insurance policies may contain limitations, so it’s critical to review and understand your coverage to make sure you are protected. 

Following the Texas winter storm, many policyholders were unaware of limitations on plumbing-related water damage and freezing conditions as it related to their insurance policies. Since this event, some insurers have modified their policy language making the risk more onto the policyholders—now requiring timely and proper repairs, routine maintenance, and extra precautions to prevent or minimizes water damage losses. 

Looking for more ways to make sure you’re protected from water loss? Try some of the following: 

• Perform precautionary risk management to protect structures and BPP
• Wrap / insulate outdoor and indoor pipes in unheated areas
• Properly seal building cracks around water pipes where they enter structures
• Check areas requiring building insulation and repair / increase where needed
• Replace traditional hot water heaters every 10 years – (this is a major cause of water losses)
• Maintain heat at a minimum of 55 degrees during colder months
• Drain and winterize plumbing lines during the off season (seasonal risks)
• Install heat monitoring devices alerting a central station if the temperature in a building falls below 55 degrees
• Install an automatic leak detection or automatic water shut off system
• Utilize stainless steel braided hoses instead of rubber
• Switch to an Antifreeze Fire Sprinkler System
• Have a qualified plumbing contractor evaluate plumbing annually and repair as needed
• Provide detailed instructions for employees or tenants on what do if they see a water leak
• Require regular off season checks in each unit (Condominium Buildings)

It goes without saying that with knowledge comes power. If you’re able to educate yourself of your insurance policy’s water loss coverage you might be able to protect yourself in an unforeseen event that could harshly affect your home or your business. If you’re like us, both are probably significant to your life.