Insurance claims for water damages
Aging valves and pipes and other culprits of interior flooding have caused a surge of property insurance claims, while claims due to fire and other hazards have become less frequent.
The starting point to determine responsibility for water leaks is to determine the cause of the leak. Most leaks occur because of ordinary wear and tear to the roof, the exterior walls, or a One in five American homeowners filed a claim for water damage from 2013 to 2017, which translates to a 2.05 percent frequency rate, up from 1.44 percent from 2005 to 2009, according to the ISO insurance analytics unit of Verisk Analytics.
Analysis by ISO shows that the average claim for water damage is about $10,000. Chubb Ltd., one of the largest insurers of luxury homes, reports that the annual number of water-damage claims in excess of $500,000 has more than doubled since 2015 while claims topping $1 million have tripled.
Water damage from interior flooding is the biggest risk that the typical homeowner faces, exceeding the likelihood of damage from such headline-grabbing catastrophes as wildfires, tornadoes and hurricanes, says Jon-Michael Kowal, an executive of USAA, a leading U.S. insurer of homes.
- Standard homeowner’s insurance policies have excluded coverage of water damages due to storm surge and river flooding since the 1960s.Homeowner’s insurance policies generally cover “sudden and accidental” damage. Policyholders who fail to fix a slow leak that ultimately causes major water damage can face a dispute with their insurer over coverage. [Wall Street Journal] – Mike Seemuth