Water Damage Claims are Coming in Waves!
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Water Damage Claims are Coming in Waves!
Learn How to Protect Your Investment Properties.
Water damage claims are coming in waves—literally! In recent years, water damage has become the leading cause for home insurance claims in Canada. If you own property, you need to familiarize yourself with this risk. Some types of water damage are typically covered under standard home insurance policies, and some simply are not. How exposed are your properties? And, what can you do to mitigate those risks?
Protecting your properties from the inside out
Many sources of water damage actually come from inside your investment property. A faulty appliance hose, an aging hot water tank, or a burst pipe can lead to extensive water damage.
Because you do not live in the home, you may fall victim to the “out-of-sight, out-of-mind” scenario. That is why it is essential to keep a regular schedule of inspections and maintenance on all of your investment properties.
What should you be looking for when you visit your properties?
- Inspect your water tanks for signs of rust or leaks and replace them before it is too late. Some newer water tanks have relatively short life spans. Keep in mind that it is much cheaper to replace an aging tank before it leaks. Once it leaks, you may find yourself paying for a new tank AND a large insurance deductible to clean up the damage it caused!
- Regularly replace the hoses on your dishwashers, washing machines, taps, and toilets. Consider investing in braided stainless-steel hoses.
- Check and repair the caulking around bathtubs, showers, sinks, and toilets as needed.
- Consider installing a backflow preventer and a water alarm system for further protection.
- Regularly remove debris from gutters and downspouts. Repair or replace leaky gutters.
- Have your roof inspected and repair any damage promptly.
- Inspect the weatherproofing around all doors and windows.
- Maintain the siding or stucco that protects your home.
- Keep trees and bushes well pruned. This will help to keep gutters and roofs clear of debris and will help you to spot any problem issues quicker.
- Be careful what and where you plant. Some plants have very invasive roots that may wreak havoc with your water lines.
Have you had THE talk with your tenants?
Walk around the property with your tenant. Do they know what to do in the event of a flood? Do they feel comfortable contacting you to report potential maintenance issues?
Keeping the lines of communication open is essential if you want to prevent a small problem from becoming a big one. This is also critical because insurance is not a maintenance plan. Most polices cover only damage that occurred in a single, identifiable event, and exclude damage that has occurred over an extended period of time such as ongoing water seepage and leakage.
Don’t assume that tenants know how to mitigate water damage risks, particularly if you rent to young students, who may be on their own for the first time. A little education can go a long way!
Some things to discuss with your tenants include:
- Do your tenants know where to find the main water shut-off valve?
- Ask them not to leave the dishwasher or washing machine running when they are not at home.
- Do they know that disposing of grease, oils, or fats in the kitchen sink can clog the drain?
- Baby wipes and feminine hygiene products should not be flushed down the toilet.
- If your tenants are going to be away from the home for more than 4 consecutive days, particularly during the usual heating season, the water needs to be turned off, or a responsible individual needs to visit the home regularly in their absence. If these precautions are not taken, many home insurance policies will not cover the damage caused by a burst pipe.
- You cannot insure what you do not own! So, make sure your tenants understand that they must purchase their own tenants insurance to cover their personal belongings and living expenses in the event of a claim.
As water damage claims continue to rise, many insurance companies are placing more restrictions and limitations on water damage losses. Don’t assume you are covered. Granted, reading your insurance policy may not be the most exciting use of your time, but those few minutes could end up saving you thousands. Policies can vary widely, so you need to choose the best one for your unique needs. Don’t wait for a rainy day, pull out those policies and call your insurance advisor today.
Chris Westrop is the Vice President of Commercial Lines at Park Insurance. HHeHe has 30 years of experience in the commercial insurance business and is a Chartered Insurance Professional with the Insurance Institute of Canada. He is also a REIN member and a regular attendee at many of our programs. Learn more about Chris and the experienced team of Commercial Insurance advisors at Park Insurance. Chris may be reached at (604) 659-3133 or [email protected].