I have bad news for you. You don’t need to have water damage in your own home to be affected financially. In our hometown of Frederick, MD, one condominium community had a nearly 179% increase in their insurance premiums because of their history of water damage claims.
Here’s what happened. Over the past 5 years the homeowners in the community placed close to $80,000 in water damage claims alone. This included water damage caused by hot water heaters and burst pipes. Their insurance company informed them that they were going to drop the community at the end of the contract because they cost them too much money. When the management company put out the bid for a new contract they went from a yearly cost of $19,000 to just shy of $53,000!
In addition to the premium increase, deductibles are being affected as well for water-damage incidents. Condo owners have a $5,000 maximum deductible (as required by law). The insurance through the HOA that covers the structure and outside of the buildings is $25,000 for a “water deductible”. All three companies that bid offered that deductible or higher. The previous deductible was $10,000 leaving the HOA with a 150% increase in their water damage deductible.
And to make matters worse, now if there is an issue, the $5,000 can still be the responsibility of the owner of the unit, but that still leaves $20,000 on the HOA. And, naturally the HOA passed along an monthly dues increase to its members.
Here’s the good news. If they can show measures to reduce the risk of water damage and don’t have more claims, they can reduce the premiums. We all understand the devastating loss of personal property and valuables in the event of water damage, now you get an idea of the damage that can be done to our wallets.
With the installation of a smart home automation solution for plumbing, like BrainPipes, homeowners, HOAs and other commercial property managers can gain peace of mind, reduce water consumption and save money.