A report by the Association of British Insurers (ABI) this month has highlighted that escape of water claims have gone up by 24% to £483m in the first 9 months of this year compared to the same period in 2014.
This brings the average cost of these type of claims to £2,638, a rise of 31% over 3 years. According to the industry body this makes escape of water claims consistently the most expensive to domestic property insurers ahead of storm and flood claims.
The ABI’s Director of General Insurance Policy, James Dalton stated.
“While claims inflation generally is impacting on claims costs, escape of water claims remain a particular headache for insurers.”
“With no sign that these costs will start to abate anytime soon, it is essential that all those in the claims and restoration chain work closely so that we better understand what can be done to help customers and reverse the rising cost of these claims.”
Issues related to the rise in escape of water payouts include more plumbed-in domestic appliances; more central heating; an increase in en-suite bathrooms and downstairs toilets; more complex plumbing systems; hidden and integrated plumbing and the use of less damage resilient materials such as chipboard.
Insurers are already taking an active stance on claims of this type with higher excesses specifically for these claims and greater scrutiny during the claims process to ensure all cases are validated.