Water damage is the leading cause of insurance losses. It accounts for over one-third of all Builder’s Risk and High-rise property insurance claims. By taking a proactive approach to risk management, insurance brokers can help their clients reduce the likelihood of water damage losses and mitigate the damages if they do. In this article, we’ll explore one of the best ways to achieve this by implementing intelligent water management technology.
Water damage is on the rise in High-rise buildings and during construction.
Water-related damage is one of the most common types of losses covered by Builder’s Risk and property insurance. According to insurance companies, water damage drives nearly half of all Builder’s Risk claims payments. Water damage can occur during any phase of construction, from underground pipes bursting to storms causing flooding or wind damage that results in water leaking into the building. In addition, water damage can occur after the active construction phase is completed, such as from a broken washing machine hose or a leaking roof.
Water damage is also one of the most expensive types of damage to repair and the most frequent one. The cost of repairing water damage can vary widely, depending on the extent of the damage and the type of building. In some cases, the repair cost can exceed the property’s value.
Floods caused by plumbing and appliance failures happen daily but are often preventable. Water damage claims due to infrastructure failures cost the insurance industry more annually than fire and theft. Plumbing and appliance failure can cause extensive damage to a building. A water leak in a condo unit will almost inevitably cause damage to the surrounding apartments. Suddenly, it’s not just one unit with the problem; it’s also the same units on lower floors. Rather than one home being affected by a burst pipe, it’s nine or ten homes.
Many believe that aging infrastructure leads to the most water damage. However, relatively modern systems can also fail due to improper installation, poor product quality or connection types, and water chemistry’s effects on plumbing systems over time. As the cost of water-related disasters in buildings continues to rise, companies are looking for ways to minimize their risk exposure. That is why it is becoming increasingly up to insurance brokers to help their clients understand coverages and available risk mitigation strategies.
How a proactive risk management approach helps prevent water damage.
Proactive risk management means that you identify risks before they happen and figure out ways to avoid or alleviate the risk. This approach seeks to reduce the hazard’s risk potential or, even better, prevent the threat altogether.
This approach has many benefits, including reducing the likelihood of accidents and incidents and avoiding costly financial losses. Water detection and mitigation plans are critical to effective proactive risk management.
Today, the best plan includes water management technology such as leak detection alarms, flow meters, and water shut-off valves to help address any leaks or flooding. These tools, when implemented correctly, can assist in mitigating loss.
In recent years, there have been significant advances in smart water leak detection technology. This technology utilizes the Internet of Things (IoT) to monitor potential water leaks in buildings and construction sites. By constantly monitoring for leaks, this technology can help to prevent water damage losses. In addition, this technology can also help to reduce insurance premiums. By properly managing risk, smart water leak detection technology can help to keep buildings and construction sites safe from water damage.
The IoT has revolutionized our ability to protect against water damage.
By bundling proactive risk management and innovative technological solutions to prevent the spread of this pernicious problem, we can significantly reduce losses while delivering a lower insurance cost and financial returns to insurance career partners.
Be it during construction, once the building is enclosed, or on a finished building it is essential to install water, temperature and humidity monitoring sensors and place them strategically. Sensors send alerts when irregular conditions are detected, enabling an immediate response 24/7. It is an approach that will significantly reduce or even eliminate more significant water damage claims.
It is important to understand that water damage is one of the biggest threats to any building or construction project. Water can quickly cause extensive damage that is expensive to repair, whether it’s a burst pipe or an appliance failure. That’s why more and more businesses are turning to intelligent water leak detection technology. By combining IoT water damage prevention solutions and proactive risk management, you can significantly reduce water damage losses while delivering a lower risk cost to policyholders and superior financial returns to carrier partners.
In many cases, smart water leak detection technology has been instrumental in helping businesses avoid or minimize disruptions caused by water leaks. As a result, many companies are investing in this type of technology to protect their operations from the potentially devastating effects of water damage.
To sum up, proactive risk management is crucial. With the right approach and technology, such solutions are designed to reduce water damage losses by up to 90%.
Do you want more details on how intelligent water management technology can help? Let us know by contacting our experts below or meeting with our team at Insuretech Connect 2022 in Vegas this September.
