Water damage claims in Canada now account for 53% of all property insurance losses.*
As a former insurance broker, I can attest to this statistic and even suggest that if all property damage was reported and covered, the number would be even higher. Why this growing trend? This is truly the fault of our own progression and modernization. If you consider that just 100 years ago hardly anyone had running water or electricity in their homes, you can understand that water damage was rare, and in turn, fire damage was high. The electrical code (if you had electricity in your house) did not exist and the norm was to light your way with an oil lamp and heat your house with wood in a cast iron stove.
In this relatively short period of time we have evolved from indoor plumbing being a novelty for the rich to living in houses that in some cases have more bathrooms than bedrooms, appliances that wash our clothes and dishes, and hot water tanks sitting on our foundations. . This is the new normal. And while our progress in electricity and heating has become an art form in terms of safety and security, we still haven’t solved the water puzzle.
I remember years ago, while navigating the ropes as a first-time homeowner, I was struggling with a leaking garage. Every time it rained, the water came in and soaked the ground. My wise neighbor was laughing at the many attempts he had made to cure the situation. He was confident that he could avoid what I thought was the large bill that would be needed to properly remedy the situation. Being a good neighbor, he didn’t laugh too much, instead he offered me a patient perspective that I will always remember; he told me “The water will find a way”. And he did, through all the gimmicks, patches, and quick fixes I could throw at him.
I was lucky in the end that the water never entered the house through the garage and after the painful reality of defeat sank in, I opened my wallet and phone book to call a professional. However, I wasn’t so lucky a few years ago when the washer didn’t work and flooded my entire basement with 4 inches of water. I was so busy worrying about water coming in from the outside that I never thought I would get hit from the inside. The words of my neighbors echoed the truth: The water had found a way!
It turned out that a single $6 hose had burst causing $25,000 in damage. (BTW: The cost of the upgraded braided hose you could have bought at the hardware store was only $12.) Yes, two months and too many headaches later, I was able to rent out my basement again. Not only had I displaced my tenant and had to find a new one, I lost rental income, the deductible, and my no-claims discount on my insurance policy (not to mention the hours I spent at the loss retrieving the property from the flooded basement). .
Now my own personal mini-disaster described above is all too common for building owners of all kinds. As mentioned above, 53% of all property damage claims stem from water damage of one kind or another. This includes broken pipes, storm damage, flooding, malfunctioning appliances, faulty building envelope construction, sewer overflow losses, and the list goes on. As building owners, you can understand the potentially devastating effect water damage can have on your investment. The rents stop, but the bills keep piling up. Tenants leave and find new facilities to rent or lease. The mortgage still needs payments as do the utilities. Consider the even higher costs when water comes from gray and black water sources. In addition to property damage, you now need to consider mold and other airborne pathogens that can contaminate property and even the air. Surely the solution is not to tear down all the buildings and rebuild them with today’s latest technology in plumbing and water damage prevention. In my case, an investment of $12.00 would have saved $25,000.
Here are some loss prevention techniques you can implement in your building maintenance program:
– keep floor drains free of obstructions;
– make sure there is adequate leveling around your building;
– install a sump pump;
– install backflow valves or plugs for drains, toilets and other sewer connections to prevent water from entering the house;
– for empty buildings: drain pipes and arrange for someone to come in to make sure there are no signs of leaks. It’s important to keep the heat on to prevent pipes from freezing, especially in older buildings.
– check the water connections, hoses and pipes for signs of wear.
Now there is no foolproof way to ensure that water damage never occurs. But if you have the contact information of a restoration company on hand, as well as the phone number of your insurance broker. Whether or not insured, it is important that property owners and managers document damage with photos or video, and immediately begin loss mitigation procedures themselves; or hire a qualified contractor to do it on your behalf. It is totally inappropriate to postpone mitigation while waiting for an insurance claims representative to arrive on site to assess the loss. At that point, in all likelihood, enough time will have passed for the microorganisms to grow and amplify, which may not be covered by insurance. Insurance policies define loss mitigation as “reasonable and prudent measures designed to preserve, protect, and secure property from further damage.”
We do this because we know “water will find a way”.
* Canada Insurance Bureau (2009 statistics cited)