At a glance
- Escape of water is one of the most common causes of domestic property claims
- High net worth clients can be particularly vulnerable, as they may have unoccupied second homes where leaks could go undetected. Multiple bathrooms and expensive internal fixtures and fittings, such as cinema rooms and gymnasiums can also exacerbate losses
- We look at some of the ways escape of water risk can be managed, and how Zurich Private Clients can help
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Escape of water is a significant risk for all types of domestic property and claims are at an all-time high. Escape of water is not just a winter event either, claims can arise at any point in the year. According to the Association of British Insurers, the total cost of escape of water claims rose from £529m to £654m in the space of three years.
While escape of water can be a risk in any domestic property – with freezing pipes, incorrectly installed appliances and faulty boilers among the most common causes – high net worth (HNW) clients can be particularly vulnerable.
Mike Johnson, a Business Manager for Zurich Private Clients, says: “Escape of water has been one of our biggest challenges over the past year.”
Why escape of water is a particular risk for high net worth clients
Repairing any property that has sustained water damage can be expensive. From installing pumps and dehumidifiers, to carrying out repairs and replacing flooring or furnishings – the costs soon add up, and the larger the property, the greater the cost.
“In addition,” says Mike, “HNW clients’ homes usually contain valuable items such as fine art or antiques, or furnishings with fabrics that can be expensive to replace.”
Underinsurance is also a risk. The value of certain items that may be particularly susceptible to water damage, such as paintings and other artwork, can fluctuate significantly. In addition, smart devices are becoming commonplace, especially in larger properties, with more sophisticated heating controls and connected entertainment systems. Clients need to consider the potential cost of replacing any expensive smart technology installed since their last valuation.
Common causes of escape of water in HNW properties
Chris Aherne, Claims Manager for ZPC, says: “One of the most common causes of escape of water is wear and tear of pipework. Large, old properties tend to have vast amounts of pipework, which corrodes over time. Many clients may not know what kind of condition their pipework is in.
“Water access points and pipes in older properties can also be difficult to find and get to. For example, they could be located under parquet flooring, which would need to be removed to investigate the problem, which is an expensive operation.”
Additionally, the more bathrooms or toilets a property has, the greater the risk of an escape of water incident. Other common features of high-value properties, such as underfloor heating and wet rooms, could increase this risk further.
HNW clients are also more likely to own a second home. Mike says: “Second homes are always at greater risk of escape of water, simply because they are usually left unoccupied for long periods. Not having a regular presence in these properties means there is a greater chance of a small leak going undetected, which could easily turn into a large problem.”
How to manage escape of water risk
Simple precautionary measures can significantly reduce the risks.
For example, understanding the layout of a property, including where water access points are on all floors, and the locations of pipes, will make it easier to identify a leak early.
Additionally, if a property is likely to be unoccupied for long periods, it may be a good idea to ask a trusted neighbour to look out for leaks. In the winter months, it is also recommended to keep an unoccupied property heated to at least 10ºC, and to install lagging.
Smart technology can also help. A wide range of water leak detectors is now available, many of which can be linked to smartphones to warn homeowners if a leak is detected. Some can even connect to other household smart devices, for example to shut off the water supply in the event of a leak.
How Zurich Private Clients can help
Our internal surveyors will visit clients and carry out a detailed assessment of all major property perils, including escape of water risks.
Clients will also receive a detailed report highlighting any risk areas and ways to manage these risks.
Zurich Private Clients can also provide round-the-clock support and guidance in the event of an escape of water incident.
To find out more, speak to your usual Zurich Private Clients Account Executive.