Insurance 101: Plumbing Supply System Failure Risks

Maintenance and servicing of your appliances is crucial to ensure that your appliances and home heating systems are in peak shape. Water heaters and water pump systems generate many inquiries such as “Do I install a traditional tank vs. tankless system?”, “What is the tank replacement timeline?”, “Do I hire a certified plumber to do the installation and removal?”. Here is a good study on some key points and recommendations that may help you avoid a water loss on your home’s interior. JMP

Most homeowners take their hot water heaters for granted -as long as the hot water is flowing; they are often installed and forgotten. Most, most water heater failures occur when the tank begins to rust and corrode, which can occur without any outward signs of a problem.

A study of homeowners’ insurance claims resulting from water heater failures conducted by the Insurance Institute for Business & Home Safety (IBHS) is noted, below.

• Water heater failures are one of the top five sources of residential water damage.
• 69% of all water heater failures result from a slow leak or a sudden burst.
• The rate of failure resulting in a water leak increases dramatically after the
• hot water heater reaches 5 years of age.
• The average age of a failed water heater is 10.7 years, and by the time a hot water heater reaches 12 years of age, nearly 3 in 4 have failed.

Here are some tips to help keep your hot water flowing without incident:

• Conduct regular visual inspections of the water heater. Check for signs of corrosion around pipe connections or standing water at the base that may indicate that the hot water heater has reached its life expectancy.
• Flush the tank annually to remove buildup of sediment within the tank. This is done by attaching a hose to the valve at the base of the water heater. In areas with hard water, more frequent flushing may be required. This procedure should be initiated when a water heater is new and should not be done on an older water heater that has never been drained.
• Check your water heater’s age. The manufacturing date of a water heater can usually be determined by deciphering its rating plate. For example, the first 4 digits of the serial number traditionally tell the year and week of manufacture. If you are uncertain how to determine the age of your water heater from the rating plate, contact the manufacturer for guidance.
• Consider replacing the tank as it reaches the end of its stated useful life, even if it is not yet leaking. Once a hot water heater has reached or exceeded its life expectancy, the risk of a slow leak or sudden burst increases dramatically. This proactive measure may save you from having to deal with an expensive and damaging leak.
• Consider the location of the hot water heater. If the hot water heater is located above or adjacent to a living area, the potential for severe water damage to your property exists and a proactive maintenance and replacement schedule should be followed.
• Have a certified plumber inspect your water heater annually; include all pipe connections, the anode rod and the shut-off valve.
• Secure it. In areas that are prone to earthquakes, ensure that the water heater is properly secured with approved earthquake strapping.

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Insurance Institute for Business & Home Safety Study (2016)

 Plumbing Supply System Failure Risks

There are two common types of plumbing supply system failures. The first involves frozen pipes, which can burst due to a buildup in water pressure caused by freezing water in an adjacent section of pipe. These accounted for 18% of all plumbing supply system claims in the study. The second and most common type of failure occurs when the supply system material fails and results in a leaking or bursting pipe. This type of failure represents two of every three plumbing supply system claims in this study.

A review of homeowner’s insurance claims resulting from plumbing supply system failures from multiple insurance companies around the country revealed:

·       Plumbing supply system failures are the leading source of residential water losses, with 48% greater losses (in terms of total payouts) than the second leading source.

·       Plumbing supply system failures cost an average of $5,092 per incident after the deductible was paid.

·       Of the claims analyzed, 65% were caused by a failure of the plumbing supply system material, while 18% were caused by frozen pipes.

·       Frozen pipe-related failures resulted in losses that were roughly twice as severe as those caused by plumbing supply system material failures.

·       The risk of a frozen pipe failure is dependent upon the geographic location of the home, the location of the pipe within the structure, and the time of year.

·       Homes located in North Region states with plumbing in the basement and/or exterior walls have the greatest risk of a frozen pipe failure.

·       The proportion of total water loss claims attributed to supply system material failure was twice as high in the South Region than in the North Region.

·       Of the claims analyzed, 22% of all supply system material failures occurred beneath the slab of homes without basements.

Washing Machine Failure Risks

Washing machine-related failures are one of the top 10 leading sources of residential water losses. The typical causes are supply hose failures, machine overflows and drain line failures.  

A multi-company and multi-region study of homeowners’ insurance claims from water damage caused by washing machines revealed:

·       These failures cost an average of $5,308 per incident after the deductible was paid.

·       Failures of supply hoses accounted for more than half of all washing machine-related losses.

·       Of the water supply hose failures resulting in water loss claims, 78% involved washing machines that were less than 11 years old. Of these failures, 54% occurred in washing machines between eight and 10 years of old.

·       The proportion of washing machine related claims to total water loss claims was 67% higher in South Region states than in North Region states.

·       The average claim severity for South Region states was 28% higher than North Region states.

·       Although the effects of washing machine location on claim frequency could not be determined in this study, in the North Region, claims for units located in basements were 24% higher than claims for units located on the first floor.

·       Approximately 6% of all washing machine failures occurred in unoccupied homes.

·       Failures that occurred in unoccupied homes resulted in claims that were on average nearly two-and-a-half times more severe than those occurring in occupied homes.

IBHS’ Recommendations for Reducing Washing Machine-Related Water Damage

If possible, install a washing machine on an upper floor or in the basement. Washing machine failures on the first floor of a home resulted in 28% greater losses due to the proximity to valuable furnishings and electronics.

The failure of a water supply hose is the primary cause of loss. Conduct monthly inspections of the hot and cold washing machine supply lines:

·       Look for signs that the supply hose may be ready to fail. These include blisters in the hose, worn tubing, stress cracks or a loose connection.

·       Replace the supply hose with a reinforced steel braided hose if it shows any sign of wear.

·       Tighten the connection if it feels loose. The most common site of failure is near the connection where the hose bends.

·       Replace supply hoses every five years, even if there is no obvious deterioration or wear. Some signs of deterioration may occur from the inside out and may not be visible until it is too late. When replacing washing machine supply hoses, always choose a reinforced steel braided hose over the traditional un-reinforced rubber hose. These hoses will last longer and are far less likely to result in a catastrophic water loss.

To further reduce the risk of failure, turn off the hot and cold water supply valves when the machine is not in use. Always turn off the valves if you will be away for several days.

Screw type valves can be difficult to operate and may develop leaks around the shaft. If a valve is not operating properly or is leaking, replace it immediately. A better solution – and one that will make shutting off the water supply easier – is to install a dual ball valve lever operated valve. This type of valve is easier to operate than a traditional gate valve since it turns on both the hot and cold water supply with a single lever.

When it comes to keeping your home dry and claim free, remember to maintain your plumbing, appliances, and keep a reputable plumber on speed dial to help extend the life of your plumbing systems. JMP

Experts in insurance solutions for successful individuals, families and businesses.

Jason M. Pond - Personal Risk Management  

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