The Financial Impact of Water Damage: Restoration vs Prevention Cost

Each year in the U.S., approximately 1.6% of homeowners file property insurance claims resulting from water damage or freezing. Home water damage repair costs are often exorbitant, partly because water may seep into areas below, and many of the materials used to construct homes will develop harmful mold and mildew that require remediation. Homeowners should be proactive about knowing the signs of water damage, the best preventative measures and the technological advancements in water monitoring and leak detection.  

Understanding Water Damage

The Florida Building Commission uses the term “water event” to describe unplanned calamities such as plumbing problems, sewage back-ups and hurricanes. Plumbing-related problems often include water leaks from pipes, faucets or valves. 

Water damage is sometimes a result of major storms that cause substantial rainfall or flooding, which often infiltrates basements, crawl spaces or ground floor areas. Those who reside in regions with cold, wintry conditions may also struggle with frozen water that expands in the form of ice, causing damage to the home’s foundation or burst pipes. Significant water leaks may also stem from damaged appliances such as dishwashers or clothes washers.

The severity and cost to repair water damage is also influenced by the category of water:

Category 1: Clean Water

The least hazardous category, clean water, is generally fit for human consumption. Common examples include water from kitchen taps, toilet supply lines and rain. Over time, clean water may develop bacteria or be exposed to contaminants that may transition (degrade)  its quality to Category 2 status.

Category 2: Gray Water

Gray water has the potential to be contaminated and may contain detergents that cause illness or irritation to humans. Some common sources include drain lines for washing machines, dishwashers or fish tanks. Category 2 water may degrade to Category 3 levels with exposure to elements such as building materials and other contaminants.

Category 3: Black Water

Black water contains dangerous contaminants and could be toxic. Some common sources include sewage or plumbing lines that carry fecal waste.

Long-Term Impact of Water Damage

There is the potential for the Category 1 and Category 2 water to continually degrade as time passes. Similarly, failing to promptly take remedial measures after incurring home water damage can lead to increasingly worsening conditions.

Among the major concerns is the development of mold, a type of fungus. The U.S. Environmental Protection Agency (EPA) explains that mold may trigger dangerous allergic reactions among humans with asthma and irritate the skin and eyes.

Some materials, including drywall or wood, often weaken after prolonged exposure to water. This could lead to structural damage, such as collapsing floors and other integral components supporting the home. Water may also cause corrosion to heating and cooling systems and plumbing.

Water Damage Restoration Costs

How much does water damage repair cost? In 2021, the Insurance Information Institute (III) estimated that the average claim resulting from water damage and freezing was $12,514. It’s reasonable to assume that the current insurance claim average has increased in recent years, along with the likely rise in water damage repair costs.

The following table contains recent estimates from HomeGuide regarding repair costs from water damage.

Prevention Cost vs Restoration Costs

Average Cost of Water Restoration

The following outlines the restoration costs based on severity:

1.   Minor Damage:

• Cost: $1,200 to $3,500
• Repairing leaks and minor damage to drywall.

2.   Moderate Damage:

• Cost: $3,500 to $7,500
• The process of extracting water, removing mold and repairing moderate damage to floors and ceilings. 

3.   Severe Damage:

• Cost: $7,500 to $15,000 or more
• Repairs needed for significant water damage, substantial mold remediation and replacement of furniture and appliances.

4.   Extensive Damage:

• Cost: $15,000 to $30,000 or more
• This involves repairing damage to multiple rooms or floors in a home resulting from structural failure and extensive mold development.

5.   Complete Home Restoration:

• Cost: $30,000 to $100,000 or more
• This might represent the results of a flood where the structural integrity of the home was destroyed or significantly compromised.

Average Cost of Preventative Measures

Homeowners who adhere to basic preventative maintenance recommendations may save money by detecting minor water problems before they require major restoration efforts and identifying leaks that likely wastewater and increase utility expenses. 

Proper Maintenance & Inspections

Perform regular maintenance as needed to prevent water damage by cleaning gutters and downspouts, replacing deteriorating caulk and grout, checking appliance lines and hoses for signs of wear and having professional plumbing inspections every one or two years.

According to HomeGuide, a professional visual plumbing inspection should cost between $100 and $200, and a video (camera) inspection of the plumbing system will range from roughly $300 to $1,100. Estimates from Angi were $100 to $200 for a visual assessment and between $350 and $1,375 for a comprehensive visual and camera inspection.

Preparing for Winter Weather

The California Water Service reminds homeowners who live in areas with cold winter weather, such as the Sierra Nevada mountains, to protect against frozen pipes, particularly in attics, crawl spaces and garages. Some best practices include insulating pipes, sealing exterior openings, and shutting off the water valve that supplies exterior spigots, sprinklers or irrigation lines during the winter.  

Water Sensors or Alarms

Another excellent preventative option involves installing a home water detection or alert system that uses newer technology.

The Flume Water Monitoring & Leak Detection system offers real-time, 24/7 monitoring of home water systems, including appliances, irrigation systems and swimming pools. The Flume system detects possible water leaks and provides notifications through an easy-to-use smartphone app. Flume recently integrated with YoLink, a California-based technology company, to expand its home water leak detection capabilities to include activating the property’s water shut-off valves.

Recap of the Financial Impact of Water Damage

Home water damage often results in the need for expensive repair and restoration costs. Examples of these water damage restoration costs include water extraction, structural repairs, mold remediation and replacing appliances and furniture. Property owners can avoid many of these costly problems by taking preventative measures, performing regular maintenance and implementing newer technology.

The Flume Smart Water System will allow you to actively monitor the water use throughout your household, promptly detect any leaks and identify ways of conserving this vital resource. 

Contact us today for additional information. 

Resources:
https://www.iii.org/fact-statistic/facts-statistics-homeowners-and-renters-insurance https://www.floridabuilding.org/fbc/publications/fact_sheets_0307/postfloodingandmold061105revised.pdf https://www.epa.gov/mold/can-mold-cause-health-problems https://homeguide.com/costs/water-damage-restoration-cost. https://www.calwater.com/video/how-to-protect-your-pipes-from-winter-weather/ https://homeguide.com/costs/plumbing-inspection-cost# https://www.angi.com/articles/plumbing-inspection-cost.html