25 Nov 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.
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. Watkins Insurance Brokers Pty Ltd (ABN 23 059 370 455, AFSL 244427).
Important note – the information provided here is general advice only and has been prepared without taking in account your objectives, financial situation or needs. Steadfast Group Ltd (ABN 98 073 659 677, AFSL 254928).
Important disclaimer – Steadfast Group Limited ABN 98 073 659 677, its subsidiaries and its associates.
The views expressed are those of the author only and do not necessarily reflect those of Steadfast.
This magazine provides information rather than financial product or other advice. The content of this magazine, including any information contained on it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.
Information is current as at the date articles are written as specified within them but is subject to change. Steadfast, its subsidiaries and its associates make no representation as to the accuracy or completeness of the information. Various third parties, including Know Risk, have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of Steadfast Group Limited.
Important disclaimer – Watkins Insurance Brokers Pty Ltd ABN 23 059 370 455, AFSL 244427.
The views expressed are those of the author only and do not necessarily reflect those of Watkins Insurance Brokers Pty Ltd.
This magazine provides information rather than financial product or other advice. The content of this magazine, including any information contained on it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.
Information is current as at the date articles are written as specified within them but is subject to change. Watkins Insurance Brokers Pty Ltd make no representation as to the accuracy or completeness of the information.
This article has been reproduced with the consent of Steadfast Group Limited.
Source: – https://www.steadfast.com.au/well-covered/insurance-for-established-business/updated-rising-water-damage-claims-whats-the-cause