Water Damage is Increasing – What Buildings Need to Know


Water damage is not new to buildings. Condo-owners, Condo Boards, Building Operators, and Property Management generally understand that water is their biggest risk. Significantly more pervasive than fire and theft, water damage continues to wreak havoc on properties and those that reside within and manage it.
Here’s what’s troubling: water damage is on the rise. In 2013, water damage accounted for approximately 44% of total claims costs; by 2018 water damage claims had risen to over 60% of total insurance claims costs (Source: Insurance Bureau of Canada). That’s a nearly 40% increase in just five years, where water damage was already a troubling statistic. Data from Zurich further suggests that water damage accounts for 71% of all paid claims.
Why is water damage so prevalent?
Climate change and extreme weather patterns continue to plague property owners everywhere, but many of these statistics are not due to overland flooding or damages due to weather. Aon recently addressed this in their April Water Risk Webinar, stating that water damage claims were increasing in commercial and multi-family buildings due to:
• Aging infrastructure (external and internal piping/building systems)
• Heavier facility usage
• Poor workmanship/installation
• Inferior products, defects
• Deferred maintenance
• Human error (inexperience) and user error (overflowing fixtures, clogged drains, open windows)
• Overall design (green roofs, concealed piping)
• Greater focus on vertical construction
• Lack of risk consideration in equipment placement
• Increasingly complex building systems and technology
• Delayed response
• Inflationary costs
BFL Canada recent article, “The New Fire: Get a Plan for Water Damage,” further discusses why buildings in particular are seeing such a rise in water issues: “Most often the issue is the lack of forethought and planning. Million-dollar condos are constructed while washing machines are hooked up with dollar store quality rubber hoses that last 5-7 years and burst catastrophically at the connection point. Heat pump systems are installed with no way to check or clear the condensate drain pan. Water isolation valves are hidden behind wall panels and covered with full length mirrors to be completely forgotten. None of these things are even a passing consideration for the average homeowner until 2 AM on Christmas Eve when the washer line explodes, flooding three floors of apartments.”
With billions spent annually on water damage claims, the insurance industry is responding. Insurance premiums are made up of a number of factors, with ‘expected claims’ comprising the largest part of the insurance premium algorithm. Given the increasing frequency and severity of water damage claims, insurers are imposing both tighter controls and higher premiums to compensate.
Insurance companies are seeking higher deductibles and may require that the water damage deductible be higher than all other perils. Building managers may find that insurance companies are requiring greater detail than ever before, analysing claims data and risk controls. A new concept that some insurers are requesting is a ‘Water Damage Plan’ for buildings, even during the construction phase of a building. Ongoing maintenance checks may be mandatory, as well as details on future capital expenditures. Site visits by insurance companies may also become common place to check on the above noted items. (Source: Aon Canada)
Water damage mitigation plans are becoming more and more common as the risk of water grows. This may include suggesting or even requiring the building to invest in leak detection and mitigation technologies, particularly for buildings deemed ‘high risk.’
Eddy’s Intelligent Leak Protection system is a solution that provides comprehensive protection and real-time insights into water issues in a building. From in-suite sensors to moisture, temperature, and humidity tracking inside riser stacks, to shutoffs in pressure reducing stations, and protection in the water main and boiler rooms – Eddy’s system protects in every area associated with water risk in a building. With 24/7 monitoring and action, water issues are mitigated immediately, significantly lowering a building’s water risk.
About Eddy
Eddy Solutions is an industry leader in leak protection and water monitoring solutions. Our suite of smart products offers a comprehensive water management system for building operators and homeowners that protects, controls, and conserves water. Our products have saved thousands of customers millions of dollars in damages and millions of litres of water waste by continuously monitoring water usage in their properties. For more details, please contact us at 1 877 388 3339 or email info@eddysolutions.com.

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