Water Damage Most Common Loss

Water Damage is One of the Most Common Insurance Losses

If your property policy is written with Basic Form coverage, you have no coverage for water damage.  We recommend you contact your agency representative to determine if Broad or Special form coverage is available.   Some older homes or buildings may only qualify for Basic coverage so the need to protect and maintain plumbing is critical.

Outlined below are some major factors leading to water damage losses. These losses are potentially contributing to a rise in insurance premiums. Water damage has become the second most common type of insurance claim after wind and hail damage. Based on recently reported data from insurers, one in fifty insured property structures will submit a water-related incident each year. Top causes for water damage losses include appliance failures, burst pipes after a power failure, plumbing leaks, and sewer back-up. The burst pipes and ensuing water damage after the winter storm that paralyzed Texas and parts of neighboring states in February 2021 resulted in over 500,000 claims.  

Reported historical figures since 2013 indicate commercial buildings are six times more likely to be damaged by water versus theft, and water damage is seven times more likely than fire.3 Industry data also highlighted an increase in the frequency rate of water damage losses.

A key concern for policyholders can be the adequacy of coverage. Insurance policies may contain limitations, so it is important to review and understand coverage. Following the Texas winter storm, many policyholders were unaware of limitations on plumbing-related water damage and freezing conditions. 

What can you do?

  • Closely evaluate policy terms and conditions
    • Wrap / insulate outdoor and indoor pipes in unheated areas
    • Properly seal building cracks around water pipes where they enter structures
    • Check areas requiring building insulation and repair/increase where needed
    • Replace traditional hot water heaters every 10 years – (this is a major cause of water losses)
    • Maintain heat at a minimum of 55 degrees during colder months
    • Drain and winterize plumbing lines during the off-season (seasonal risks)
    • Install an automatic leak detection device around Hot Water Heaters or automatic water shut off system
    • Utilize stainless steel braided hoses instead of rubber at toilets and sinks
    • Switch to an Antifreeze Fire Sprinkler System
    • Have a qualified plumbing contractor evaluate plumbing annually and repair as needed
    • Provide detailed instructions for employees or tenants on what to do if they see a water leak
    • Require regular offseason checks in each unit (Condominium Buildings)


Please contact your agency representative to make sure your policy includes the proper coverage necessary to cover water damage from broken pipes.