With the cost of claims for escape of water rising, how can smart home tech make an impact and transform the insurance industry? In this Opinion piece, Craig Foster, CEO, LeakBot, looks at how tech can minimise water damage, save consumers money – and the stress – of dealing with escape of water within the home.
Escape of water in the home is a highly pervasive issue. Data recently collected from 1,000 LeakBot devices revealed that almost half (43%) of domestic properties in the UK have suffered water leaks, which often go unnoticed until it’s too late. When this happens, the cost and damage for homeowners and insurers can be significant; it’s estimated that insurers in the UK pay out around £1.8m in claims every day for damage caused by leaks in the home.
The data also revealed that the average flow rate for a property with an active leak is 20.63ml per minute, which amounts to 30 litres a day if left unrectified. This level of water slowly escaping can have huge implications not only for insurance claims but for housing infrastructure as well.
Unfortunately, the reality is that a large percentage of escape of water cases are, in fact, slow insidious leaks that don’t appear to be a problem until it’s far too late. Many homes are built in ways that make leaks even harder to detect – modern bathrooms with concealed toilet cisterns are a popular choice, as is plastic push fit pipes. Similarly, many homeowners are unaware of the location of the stopcock and ways in which they might be able to prevent leaks from happening. As such, many insurers have been embarking on awareness raising campaigns to educate homeowners on the risks.
With the design of new homes making identification more difficult, smart home technology presents a unique opportunity to minimise this growing risk and is now starting to gain prominence. Insurance brokers have traditionally operated in line with a reactive model; responding to events and disasters and then compensating victims appropriately. But things are changing, and the sophistication of new technologies mean insurance brokers can gain granular insights into the level of risk so that they can better assess pricing and policy cover.
Insurance companies are increasingly highlighting the need for low-cost, non-invasive tech solutions that can detect and alert customers to instances of escape of water before any significant damage is caused.
Leak detection devices are an important step in the development of IoT
Insurance companies are also starting to recognise the value of end-to-end service systems that use the IoT to monitor, detect and finally resolve any issues related to escape of water. In systems such as these, a notification of a leak detected by a connected device is quickly followed by access to experts and engineers, who are sent to find and fix the problem quickly and efficiently. These sorts of systems are currently few and far between, with pioneers such as LeakBot blazing the trail in partnership with selected insurers looking to work with this escape of water claims mitigation model.
The LeakBot smart water leak alarm requires no professional installation, is inexpensive and non-invasive for the customer, which makes it an ideal device for policyholders looking to protect their properties and mitigate potential disaster. The device detects all leaks down to 5ml per minute on the mains water supply, and alerts customers to the presence of a leak before any damage can occur. Once a leak has been detected, an engineer equipped with patented leak detection technology is deployed to find the precise location of the problem and rectify it. From that moment
on, customers benefit from peace of mind that their homes are leak-free and if they are discovered not to be – a team of LeakBot trained engineers will be on hand to find and fix the issue. This approach pivots away from a reactive model towards prevention with insurers such as the RSA and Top Danmark adopting this technology to minimise the impact of escape of water for their customers.
Having responsible homeowners assisted by connected devices provides a greater level of insight for insurers on the level of existing risk. This can then potentially lead to lower rates that could be offered to customers taking the right precautions. Most insurance premiums go towards pay-outs for a small proportion of the population that may be less responsible – so developing IoT solutions to minimise risk provides a benefit to many consumers, as well as insurers.
The future looks bright for both customers and insurers as we move towards a preventative model in home insurance. Thanks to smart home tech such as LeakBot, the costs associated with escape of water damage could be dramatically reduced.