Water, Home Insurance Exclusions, and You

Written by on 2015-07-14 6:19 AM in , , , , , . It has 0 Comments.

Water claims and coverages are changing and evolving faster now than ever before. 15 years ago the average water claim cost around $5,000; today it’s closer to $15,000 and there’s far more water claims than ever.

Recently there have been news stories about a Waterloo Ontario couple having their claim, involving a burst sprinkler system, denied. Erb and Erb Insurance Brokers Ltd. wants to make sure everyone is aware that their homeowner’s, condo or tenants polices have certain exclusions dealing with water loss.

Water claims have always been a little tricky to deal with, and the new sprinkler claim adds a bit of a unique twist. While it is easy to rush to a judgement on this case we don’t know all the facts. Since the family in question live in a Condo unit we don’t know who is responsible for what? For example, it could be that the Condominium Corporation is responsible for the sprinkler system. And since the couple have gone to the courts we likely won’t find out any more information. That doesn’t necessarily affect whether or not coverage should exist under the existing policy, but it does create the need for explanation.

Related Read: The Challenge of Too Much Water

In general, whether or not coverage should exist for a potential water claim we refer to the policy wordings. Policy wordings detail what’s covered and not covered under the policy and since insurance is complex these wordings can be pages and pages long.  For this particular situation, where pipes have frozen during the normal heating season, insurance companies typically subscribe to the same wording as set out by the Insurance Bureau of Canada, which states the following:

“WATER DAMAGE COVERAGE

This extends your coverage to include loss or damage cause by water, but only when the damage is caused by:

a) the sudden and accidental escape of water from a watermain;
b) the sudden and accidental escape of water or steam from within a plumbing, heating, sprinkler or air conditioning system or domestic water container, which is located inside your dwelling;
c) the sudden and accidental escape of water from a domestic water container located outside your dwelling but such damage is not covered when the escape of water is caused by freezing;
d) water which enters your dwelling through an opening which has been created suddenly and accidentally by an Insured Peril other than water damage;

e) water from the accumulation of ice or snow on the roof or eaves trough, which enters the dwelling through a roof;”

 

Of particular importance in this case is the following excerpt from the wording:

The insurance company does “…not insure loss or damage:

“i. caused by freezing during the usual heating season:

1. within a heated portion of your dwelling if you have been away from your premises for more than 4 consecutive days but you will still be insured if any of the following precautions have been taken:

  • arranged for a competent person to enter your dwelling each day you were away to ensure that heating was being maintained, or
  • shut off the water supply and had drained all the pipes and domestic water containers, or
  • if your plumbing and heating system is connected to a monitored alarm station providing 24 hour service”

Whenever our clients go on an extended holiday or trip during the heating season (November to April/May) we recommend they do at least one of three things: shut off the water, have someone check their home daily, or have their heating and plumbing connected to a monitored alarm station. As a broker we actively work to support our valuable clients to the best of our ability ensuring their legitimate claims are being handled quickly and properly.

An Ounce of Prevention Beats a Pound of Cure

Prevention is why Erb and Erb Insurance Brokers Ltd. actively educates our clients so they can minimize their risk of having a claim in the first place. We understand the fine print of insurance policies so we can explain the issues and options a client faces. If the above noted couple had arranged for either having someone come in daily or having a monitored alarm they would have met the obligations under the policy, thus coverage would have existed, and, in all likelihood, the damage / loss might have been mitigated too.

We don’t entirely know what will come as a result of this particular situation, yet this matter has certainly raised some questions about the existing policy wordings and a possible need for some revision in this particular area, namely for those homes or residential properties with sprinkler systems.

One thing we do know is making sure your home is secured while you are away. Even in the summer time before you head out on vacation you might wish to turn off your main water supply, because burst pipes can happen at any time of the year.

Related Read: Tips to Avoid Have Your Home Burglarized

Do you have any questions about water loss? Please comment below.

Visit our links to get a second opinion on your home insurance, condo insurance, tenants insurance, or business insurance.

Thanks for reading.

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