Water damage in residential homes: What property managers and landlords need to know
07/14/2021
Escape of Water (EOW) is a term used to define a water leak in a property. It usually occurs in instances where there is a catastrophic burst or slow leak from the plumbing or heating system involving pipes and joints, but also appliances or even faulty bathroom sealant. EOW related situations have increased across all building types and industries over the last few years and are the most likely causes of insurance claims. The Association of British Insurers (ABI), reports that in 2019 the value of domestic and commercial water damage claims paid was £981 million, with the average cost of a water damage claim also known to have increased significantly in recent years. Furthermore, it says that EOW incidents are responsible for nearly one in five claims made on buildings and contents, costing £2.5m every day. In 2020 there were approximately 238,000 EoW claims at an average cost of £3,170 per claim – a 50% increase in cost from 2014.
Zurich’s own data suggests that whilst the total number of water damage claims we handle has stayed relatively static, the magnitude and cost of such claims has increased sharply and continues to rise.
What difference does a leak make?
When it comes to seemingly small problems in a residential premise you manage or own, for example, the home is a house in multiple occupation (HMO), escape of water is a commonly overlooked one. However, the reality is that an innocent looking leak from a toilet cistern or washing machine, can over time, become a much bigger problem. These can range from black mould growth, timber decay and a musty smell - to larger scale issues which are expensive to rectify, such as a rotting substructure, bathroom floor collapse or extensive water damage to structures below. Failed waterproofing for example, can require a complete refit of the bathroom and installation of a new membrane. Regardless of the financial impact, there will also be significant disruption for the property owner, manager and resident of the affected home. Property managers are likely to experience decreased customer satisfaction and reputational damage, on top of actually having to arrange inspection and repairs. Owners may experience a loss of rent, as well as increased insurance excess or premiums. For the occupant, EOW events can be very stressful, especially if they have suffered the loss of sentimental goods or valuables. Residents may even be required to move out of a private rented home temporarily for a number of months, on health grounds, or if it needs major repairs or building work. Failure to comply with a responsibility to ensure homes are fit for human habitation, can result in legal action being taken by tenants against property owners.
Checklist to help prevent escape of water
Here is our five point checklist below, to help mitigate the risk of EOW:
1. Education is key. Ensure occupants know where the water shut-off valve (stopcock) is in case of emergency. Test the valve to make sure it can be turned off quickly and easily
2. Resident checks. Ask residents to complete an annual checklist, requiring occupants to periodically check and report on the condition of key plumbing components, including in difficult-to-see areas, such as behind bath and shower panels - include these checks within the tenancy agreement
3. Maintenance programme. If you have responsibility for the maintenance and repair of a domestic property, make sure there is a comprehensive, planned preventative maintenance system in place
4. High tech solutions. Consider installing leak detection devices that can shut off the water supply and raise an alarm in the event of a leak. Intelligent and programmable equipment also allows you to remotely manage water availability in unoccupied premises, to shut it off and reduce the risk of water damage when it’s temporarily vacant
5. Skills and know-how. Tempted to try to mend something yourself? Remember the fact that incorrect installation of pipes can lead to a massive escape of water. For example, not sufficiently tightening a compression joint, or not shutting off the stopcock when fitting a new pipe. Always use experts with the right qualifications and equipment to carry out installations and repairs - or it may cost more in the long-term
Further guidance
As the severity of EOW claims is rising, we are urging all landlords and property managers to read our comprehensive EOW guide here. In Zurich’s experience, some relatively easy and inexpensive steps can be taken to help get water damage risks under control, and by managing water damage risk more effectively, the risk, cost and disturbance associated with an EOW incident can be significantly reduced.
