Rising water damage claims: what’s the cause?

A new report shows there has been a substantial jump in insurance claims as a result of internal water damage since 2014.

Insurer Chubb’s new report, Get Smart about Water Leaks, has found claims related to water damage have grown by 72% over this time. The average value of claims has also increased from $17,627 to $30,361.

According to the report, water damage makes up 34% of the insurer’s property-related claims. By comparison, claims related to fire make up just 16% of its claims, with claims as a result of burglaries comprising just 9% of all claims.

Michael White, Steadfast’s broker technical manager attributes the rise in water-related claims to ageing buildings not being properly maintained.

“Failing pipes are a huge issue for older buildings and often the cause of claims related to internal water damage. Issues to do with soil movement as a result of drought can also crack pipes and lead to water damage,” he explains.

“According to the report, water damage makes up 34% of the insurer’s property-related claims”

This happens because during times of drought, pipes located underground can rupture as the dry soil moves, causing damage to pipes and producing leaks.

But it’s not just older buildings that experience water damage as a result of leaks. Faulty waterproofing in new buildings can also cause problems that lead to insurance claims.

“The standard of waterproofing work can be poor in newer buildings. A related issue is leaky pipes from appliances such as dishwashers and washing machines causing water damage that leads to claims,” White adds.

“Flexible hoses are often to blame. In the past, it was more common to use fixed hoses. Now flexible hoses are often installed under kitchen and bathroom sinks. These hoses can deteriorate over time and crack.

But they are visible, so it’s quite easy to check them to see if they are perishing,” he adds. One report claims up to 20 per cent of all claims related to water damage are as a result of flexible hoses.

This happens because during times of drought, pipes located underground can rupture as the dry soil moves, causing damage to pipes and producing leaks.

But it’s not just older buildings that experience water damage as a result of leaks. Faulty waterproofing in new buildings can also cause problems that lead to insurance claims.

“The standard of waterproofing work can be poor in newer buildings. A related issue is leaky pipes from appliances such as dishwashers and washing machines causing water damage that leads to claims,” White adds.

“Flexible hoses are often to blame. In the past, it was more common to use fixed hoses. Now flexible hoses are often installed under kitchen and bathroom sinks. These hoses can deteriorate over time and crack.

But they are visible, so it’s quite easy to check them to see if they are perishing,” he adds. One report claims up to 20 per cent of all claims related to water damage are as a result of flexible hoses.

Aside from pipes, faulty guttering is another common cause of claims due to water damage. “After heavy rain, claims related to gutters that have been blocked, usually by leaves, also tend to rise. Typically, the water enters the building  causing damage to carpets, curtains and furnishings,” White adds. Check your gutters regularly to reduce this risk.

Indeed, it’s an idea to ensure your premises are always properly maintained to reduce the risk of water damage. This includes pressure testing internal pipes.

If you do suffer water damage to your premises, your policy will usually cover the cost of fixing the damage, but it won’t usually cover you for fixing the cause of the leak.

Says White: “Your policy often won’t cover the cost of fixing the burst pipes. Similarly, if a pipe attached to the dishwasher bursts and damages the flooring, the policy will cover the cost of repairing the damage, but not the dishwasher if the incident was as a result of the pipes deteriorating as they normally would.”

With water-related claims on the rise, now’s the time to check your pipes to reduce the potential for this risk affecting your business premises.

Important note – the information provided here is general advice only and has been prepared without taking in account your objectives, financial situation or needs