How to deal with insurers
At the root of a multi-million-pound problem is a cause worth a few pennies.
Figures from the Association of British Insurers (ABI) show that in the first nine months of 2017, the cost of damage caused by escape of water was £483m. Insurers pay £2.5m for water escape claims every day and nearly one in five insurance claims are for water damage.
Whether it’s a burst pipe, a sub-standard part or a poor installation, the problem could often have been avoided in the first place by investing just a little bit more on the right parts and skills.
The irony isn’t lost on the insurance industry which carries the financial settlement cost. But there is also the reputational cost to the heating and plumbing industry which affects the people who do a good job.
In domestic settings, research by the ABI reveals the causes in the increase of water damage claims:
• more plumbed-in domestic appliances
• more central heating system installations
• an increase in the number of en-suite bathrooms and downstairs toilets
• more complex plumbing systems
• hidden and integrated plumbing
• the use of less damage-resilient materials such as chipboard.
The shock of the new
One of the biggest problems has been new developments where bad design, cheap parts and work by unqualified tradesmen has led to a rise in claims. The problems have been so bad that Parliament has investigated the issue on behalf of angry homeowners.
And it’s not just the financial cost that is a problem. With demand for water on the increase, water firms are under pressure from environmental campaigners and the regulator Ofwat to cut water waste through leakage.
So the plumbing industry has stepped in to help solve all this by working in partnership with water companies and product manufacturers to incentivise good practice. The idea is simple: qualified workers do a better job and lower the risk.
Some water companies are providing incentives if an approved plumber or approved groundworker is used during construction.
It’s being done through WaterSafe, the national accreditation body funded by the water industry to help customers find competent and qualified plumbers in England, Scotland, Wales and Northern Ireland. It’s backed by the CIPHE.
WaterSafe has also created leaflets giving advice on the water industry code of practice for laying water pipes as well as using approved products and WaterSafe approved plumbers and groundworkers. This ensures plumbing complies with the Water Supply (Water Fittings) Regulations, designed to keep drinking water healthy and prevent waste.
Julie Spinks, Director of WaterSafe, says: “By installing robust water connections and watertight plumbing, developers will also keep customers’ water bills down as all new properties are fitted with water meters so homeowners pay for the amount of water they use.”
But an unsuspecting installer can find themselves on the end of a legal battle if someone on a site has failed to follow instructions or someone else has subsequently altered a system.
The ABI explains the rise in claims and what consumers should be doing: “Claims for water leaks are a growing concern for our members given the rapidly increasing cost of the average claim. This is largely down to the higher cost of repairing homes and businesses which are using luxury fittings on an increasing basis. The trend for boxing in fitments and pipes means the early signs of a leak can go unnoticed and more damage is done before a problem is detected.
“The ABI has been promoting advice to consumers on the importance of having new appliances installed professionally and the need to investigate damp patches promptly. Insurers also encourage the use of leak detection devices which can be extremely effective at preventing damage. Again, they need to be fitted by a professional.”
For installers, that emphasis on being a professional is vital – as is being able to evidence it.
Show your credentials
Christopher Bates, Divisional Director at industry insurance broker UIB, says: “We’re not insuring the 50p part you’re using, we’re insuring against the damage caused by the insured peril i.e. water damage. In order to get premiums down for covering liability, we need to provide underwriters with the evidence. The more qualified and better trained you are, the lower the premium.”
The same goes for carrying out insurance claim work: “If we’ve got someone with CIPHE membership and you’re qualified, compared to someone who isn’t, who would we rather employ?”
The three common causes of litigation, he says, are poor controls, poor management and poor qualifications.
In the event of a legal issue arising, proving your claim with contracts, photos and sign-off by an approved person are crucial.
He says: “If there’s a court case for negligence and a member is asked to provide evidence, you need it. Of course, there are mistakes and you can mitigate it with an all-risk policy. It’s better to be safe than sorry.”
UIB specialises in the plumbing and heating industry in the UK and it is the only insurance partner recommended by the CIPHE. In addition to Public Liability Insurance, UIB can also help with insurance for tools, vans, breakdown, motor fleet, employer’s liability and much more. It offers preferential premiums for CIPHE members and policies are available to buy online 24/7, through UK-based call centres, via email or face to face.
To find out more, visit www.uibdirect.co.uk
Avoiding the void
Homeowners might think they are saving themselves a fortune by cutting corners on plumbing and heating.
But if it leads to a claim, their ‘hack’ may leave them hacked off if their insurance firm decides they have voided their claim.
The Association of British Insurers has this advice for homeowners that you can pass on to customers.
1) Keep on top of property care. “Insurance is not a maintenance contract. You have a responsibility to look after your property.”
2) Don’t DIY. Leave it to a professional. “You can’t claim for a problem caused by a DIY mishap if you didn’t pay for accidental damage cover in the first place.”
3) Don’t stay away too long “Unoccupied properties may be treated cautiously by insurers. In cold periods, pipes can freeze and burst. Keep the heating maintained at 15˚C.”
Leaflets for both installers and homeowners can be downloaded at watersafe.org.uk/developers
This article first appeared in the May/Jun 2020 issue of P&H Engineering, the magazine for members of the CIPHE. Find out how to join here.