Even though COVID-19 has kept more people inside than ever before, far too many homeowners may be overlooking interior water leaks and putting off their repairs.
Since the first stay-at-home orders were issued in March, roughly 20 percent of homeowners have noticed some form of water damage. That represents 25 million households in the United States. More troubling, 12 percent of the homeowners who spotted an issue were too concerned about exposure to the virus to bring in a contractor to make the repairs, according to a survey by Chubb, the world’s largest publicly traded property and casualty insurer.
“While hurricanes, earthquakes and wildfires generate headlines, water damage remains the clear threat to homeowners, especially high net worth individuals and families who live in multimillion dollar homes that are likely to house far more expensive possessions than what their dwelling is worth,” said Charlie Graham, a national high net worth business development executive at Orchid Insurance. “Not only is water damage the most frequent cause of loss, delaying maintenance can allow a small repair to develop into a costly oversight.”
Graham said Orchid Insurance provides agents with access to special coverages from Chubb, which offers credits to eligible homeowners who have installed flow-based water-leak detection devices to reduce and prevent damage. Insurers like Chubb are turning to artificial intelligence, predictive analytics, and the internet in the hope that smart homes devices and Wi-Fi-connected water leak detectors will reduce non-weather-related water losses by more than 90 percent.
High Net Worth Individuals Vulnerable
Internal water damage accounts for 45 percent of all interior property damage. It occurs more frequently than fire or burglary. Despite the problems posed by frozen pipe leaks and failures, faulty plumbing, sewer backups and broken appliance water lines, Chubb reported no more than a third of homeowners take the simplest steps to protect their dwellings.
Of all homeowners, Graham said high net worth individuals can be particularly negligent. For instance, when compared against other income groups, Chubb found high net worth individuals are most likely to consider themselves “vigilant” about conducting preventative maintenance; yet are the least likely income bracket to rank internal water leaks as their top home-related concern. High-net-worth homeowners are also least likely to periodically inspect appliance hoses, a frequent cause of internal water leaks.
In the winter, when data suggests homeowners are 40 percent more vulnerable to internal water damage, Graham said Orchid Insurance encourages its partner agents to help their clients take the simple measures, such as inspecting hoses and faucets, installing emergency pressure-release valves, checking pipes and knowing the location of a home’s main water shut-off valve, which can stave off costly repairs.
Standard homeowner’s policies typically cover losses created by a sudden or accidental water burst or leak, broken appliance hose, overflowing toilets and water heater failures. Most policies will provide for the replacement cost coverage for damage to a home. At some point during their coverage, one in 15 homeowners will file a claim due to non-weather-related water damage.
Insurers bear the brunt of those claims. Non-weather-related water damage costs personal lines insurers $8.2 billion annually or on average $6,696 per claim, which amounts to 20 percent of all property insurance losses in the United States.
Orchid Insurance accesses the industry’s leading providers of admitted specialty high net worth insurance including Chubb, AIG, Vault, and National General Premier to streamline agent and broker operations and underwrite the sought-after coverages that your client needs. Make no mistake about it: Orchid Insurance is the First Choice for your high net worth solutions. https://orchidinsurance.com/
