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In the wake of the severe winter storm that made its way across Texas, we are exploring the catalysts and resolutions behind water damage this month. The deep freeze produced heavy damage to buildings and homes in the form of burst pipes, valves, and tanks. Even after electricity was restored to many areas, residents were left with no source of running water and homes devastated by water damage. On February 21, after a majority of the power was restored, 8.6 million people were still being told to boil their drinking water, and about 120,000 others had no water at all as plumbers and water utilities battled an epidemic of leaky, broken pipes.
As of February 20th, a spokesperson for USAA reported over 30,000 Texas insurance claims and State Farm reported nearly 20,000. The high majority of these claims are associated with burst pipes and issues resulting from power outages, all inflicted by the extreme freeze. The year before, in 2020, State Farm received only 75 insurance claims for frozen water pipes, totaling a state average of $10,300; the nationwide average for 2020 was $15,500.
Water damage is costly. Between insurance claims and the general cost to repair damage to the cost of operational downtime, we’ve explored various ways you and your business can mitigate the risk water damage imposes on both business and structure.
Water damage, like all disasters, comes in two forms: man-made and natural. Man-made water damages primarily stem from poor maintenance and natural damages are usually caused by destructive weather phenomena. The two can work in tandem to create the most disastrous situations, making general upkeep of your facility the most proactive way to mitigate risks.
Basic Prevention – Mitigation Plan
Most organizations identify natural disasters their facilities are most prone to and create a plan of action should those disasters occur. This plan, called a Mitigation Plan, helps a business navigate disasters and mitigate business disruptions in the event of a disaster.
Personnel To successfully mitigate business disruptions in the event of a natural disaster, a company’s personnel should:
Equipment To prevent excessive damage from natural disasters, a facility’s equipment should be running at optimal performance. To achieve the best facility preparation, a company should:
Other Preparation Spill control kits are valuable for not only chemical spills but water spills or leaks that could damage your property. Many companies sell spill kits for both commercial and residential settings. These kits include:
The 80% Rule
One of the most common coinsurance breakdowns is the 80/20 split. Under these terms, the insured is responsible for 20% of the costs to restore and the insurer pays the remaining 80%. The 80% rule in home insurance only concerns property coverage, not the liability coverage that also comes with a basic policy.
Coverage Limitations
All types of insurance policies will have a coverage limit and a deductible. Standard contents insurance policies will limit coverage for certain types of valuable items, like antiques, memorabilia or jewelry. While your contents insurance coverage may be higher than the value of these pieces, the policy may only provide limited coverage.
Optional coverage can be purchased to provide additional protection, often referred to as a rider, floater, endorsement, or scheduled personal property coverage. According to Triple-I, an item should be professionally appraised before being scheduled.
Restoration and Repairs
Immediate action is crucial to mitigate water damage. The longer the problem persists, and the resulting water lingers, the more the issues worsen. The following methods of water damage restoration should be part of a reputable restoration provider’s core services. With everything in one place and 24/7 accessibility, ATI Alert can be used:
A Little History
Industry chatter often claims old pipe is higher quality than new pipe. But is this true? While some factors–like tactile strength and durability–make these accurate, older pipes have their fair share of flaws. The science behind pipes seems to be an evolving process. Today, firms should design with caution. Though the wall thickness tolerance for a pipe wall is around 25%, centering to the exact ASTM requirement ensures a better product. Issues with pipe over the years.
Water damage is having a significant impact on building insurance as the frequency and cost of water damage losses continue to increase. According to the Insurance Information Institute, water was the third-leading cause of claims in the past decade with an average of almost $10,000 per claim. For every property or business, the solution to water damage losses is a balance of three factors: risk appreciation, risk assessment (including a water damage mitigation plan), and water detection technology to address the inevitable gaps. While no business class is truly immune, commercial real estate (especially high rises), residential, hotel, and health services industry classes are experiencing significant interior water damage claims.
The most common causes for water damage claims:
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