Why more insurers should join forces with smart technology companies to prevent escape of water claims

28th January 2020

Experiencing bad weather is an inevitable part of living in Britain. Storms and torrential downpours cause havoc and damage to homes, increase the impact of insurance claims and ramp up premiums as a result.

However, one of the major claims that homeowners make during the winter season is for ‘escape of water’ (EOW). According to the Association of British Insurers (ABI) the total cost of EOW claims has increased year on year to 28% and insurers are paying out nearly £4 million per day on claims in the UK alone.

Two years ago, Halifax revealed that the notorious ‘Beast from the East’ contributed to 86% more EOW claims that year versus the same month (March) the year before in 2017. In March 2018 it saw 1,536 claims versus 824 claims in March 2017.

Every year the general advice from insurers to homeowners is to set thermostats to a certain temperature to avoid pipes freezing, insulate exposed pipes, draining water systems before going on vacation and being familiar with the location of the stopcock. But this has no longer proved to be the only answer to reducing claims overall.

Increasingly, technology has had a role to play. Smart water leak detection systems are becoming increasingly popular in the battle to reduce the chances of leaks in homes and the damage it can cause. There are a number of providers of such tech that have sprung up in recent years including Wint Water Intelligence and Leakbot to name but a few.

As a result, a number of brokers and insurers have partnered with such providers. Just recently it was reported by Insurance Today that digital insurance provider Igo4 launched a connected home insurance product along with Leakbot and financial product price comparison website Compare the Market.

This type of tech is increasingly being recognized as a major asset in the fight against EOW claims. Just today it was announced that Wint Water Intelligence won the Gold Award for the ‘Excellence in Technology Claims’ category. It picked up the award alongside its UK partner Aqualytics, which provides on the ground customer service for Wint.

There’s no denying that technology is playing a more important role than ever in the fight against EOW claims. The prevention of EOW claims is no longer just a way to ensure that the industry remains profitable and that homes avoid the hassle of dealing with water damage and calling out a 24-hour plumber.

It’s become far more than that – to one of conservation. Water is one of the very few precious commodities that we have on earth and the amount of waste through water leakage is astounding.

In 2018, the Consumer Council for Water called on water companies to tackle this problem. This was on the back of the CCWater’s latest report on resilience published that year in August, which showed that overall leakage levels rose by 1.5%.  

Back then, average water consumption had also increased to 141 litres per person. With the population now sitting at around 66 million in the United Kingdom alone, that rate of consumption and the associated cost is unsustainable in the long term.

It’s no longer enough that water companies pitch in to tackle this problem. It makes sense for more insurers and brokers to get in on the act as well and incentivise households to invest in tech to prevent water wastage and damage. With the water and insurance industries on board it will encourage other industries to follow suit and make a difference.

Image by Jesus Leal from Pixabay 

 

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