Water is an integral resource in the daily lives of most Americans, used for bathing, drinking, cooking, cleaning and much more. While water is vital, it is also a common source of property damage. To protect themselves, mortgage lenders usually require property owners to maintain homeowner’s insurance coverage, which will pay for significant losses and needed repairs resulting from water damage or other adverse events.
Data from the Insurance Information Institute (III) reports that approximately 5% of U.S. homeowners file insurance claims each year, of which slightly more than 20% are related to water damage. Estimates suggest that water damage contributes to roughly $20 billion in property damage annually.
Here, we will address the common causes of residential water damage, explain the role of property insurance in covering damage claims, and outline how to prevent water damage in your home.
Average Cost of Water Damage Insurance Claims
Insurance statistics for 2023 reveal that the average claim payout for residential water damage and freezing incidents is approximately $12,514, which is roughly eight times more common than fire.
A study by Today’s Homeowner found that mold remediation services resulting from home water damage usually range from $1,000 to $3,500, and drywall repair and replacement services range from $300 to $1,000. The per-hour labor rate for these services generally starts at a minimum of $120, with emergency response services at a premium of two to three times the standard rates.
The following table outlines which types of water-related damage claims or perils are (and are not) typically covered by standard homeowner’s insurance policies.
| Perils: Typically Covered | Perils: Typically Excluded From Coverage |
| Frozen or burst pipes | Floods |
| Appliance leaks | Earthquakes |
| Roof leaks | Sewer system backup |
| Storm damage | Incidents resulting from policyholder negligence |
| Caused by water used to extinguish a house fire |
Source: Allstate
Homeowners should closely review the terms of their specific property insurance policies, as variations may exist among insurance carriers. Generally, the excluded coverage options are available for purchase, which are commonly referred to as add-ons, riders or endorsements.
Certain areas are at high risk for flooding, which is among the most potentially devastating water-related events, with remediation costs often exceeding $40,000. Many insurers traditionally imposed exorbitant premiums (rates) in these vulnerable regions or simply no longer offered flood insurance in these areas. Today, the Federal Emergency Management Agency (FEMA) supports the National Flood Insurance Program (NFIP), which strives to provide affordable coverage for Americans.
In case of a significant water-related calamity that requires filing a homeowner’s insurance claim, property owners should create a comprehensive inventory list and description of all belongings kept within their home and update it periodically.
Common Causes of Water Damage
Storm Damage
Roof leaks are commonly the result of severe weather events, as shingles are dislodged by high winds or damaged by falling trees or branches. Flying debris could break windows around the home’s exterior and result in water damage from heavy rain.
Appliances
Most of the appliances found in homes today use water. Common examples include dishwashers, washing machines, ice makers, toilets and water heaters. In many cases, these devices have hoses that are potentially susceptible to cracks and seals or gaskets that can deteriorate over time and result in major water problems. The majority of air conditioning units use a liquid refrigerant; however, because they remove humidity from the air, most of these systems will generate moisture in the form of condensation.
Plumbing Systems
Most homes have vast plumbing systems with pipes moving water throughout. In some cases, leaks in hard-to-reach places such as interior walls may go undetected and create significant problems with mold or cause structural problems by rotting out floors, ceilings or joists.
In extremely cold environments, water pipes might freeze and burst. Clogged drains in sinks or laundry rooms are also a common source of water-related problems.
Foundational Intrusion
Homes with basements or crawl spaces are often prone to water seepage or intrusion. Basements often have subsurface groundwater entering through points where the floor meets the wall or through cracks that develop around the foundation. Homeowners who fail to keep gutters and downspouts clean often find water in their basement or crawl space when it rains.
Water Damage Prevention Strategies
Property owners should gain an understanding of the best water damage prevention tips. Some of the most effective measures to prevent water damage include:
- Drains: Place a screen over drains in bathtubs and showers to prevent hair from entering and creating a clog. Never pour oil or grease down drains, which may cool and create an obstruction.
- Appliance lines/hoses: Appliances such as dishwashers and washing machines have cycles where water pressure is strong and the hoses endure significant heat and carry dirt particles and detergents. Check these lines and hoses at least once each year for any signs of wear.
- Frozen pipes: Those in regions with extreme winter temperatures should consider insulating any pipes located in unheated areas such as crawl spaces or garages. When traveling during the colder months, keep your home’s thermostat above 50 degrees to prevent freezing.
- Choose durable components: Consider replacing weaker lines and hoses composed of copper or plastic with stainless steel or other more resilient materials.
- Install a leak detection device: Flume is an option for 24/7 monitoring of your water system.
Effective water damage prevention is largely the result of periodically inspecting your home for emerging problems and diligently performing maintenance tasks.
Invest in Flume Water Today and Protect Your Home
The Flume Smart Home Water Monitor system uses some of the latest technology to monitor water use and detect possible leaks. The system from Flume has been installed in many thousands of homes and has demonstrated effectiveness in managing, monitoring and conserving water.
The self-installation process is fast and simple and requires no plumbing work. The system features a weather-resistant sensor fastened to the home’s water meter and monitors water use, flow rates and more.
Because the system connects to your home’s WiFi and features an app on your smartphone, real-time monitoring and alerts are delivered 24/7.
Resources:
https://www.iii.org/fact-statistic/facts-statistics-homeowners-and-renters-insurance https://www.forbes.com/advisor/homeowners-insurance/water-damage/ https://todayshomeowner.com/cleaning/cost/water-damage-restoration-cost/ https://www.allstate.com/resources/home-insurance/water-damage
