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Avoiding Water Damage Claims

WATER, WATER EVERYWHERE

Thomco's Loss Control Director Bill Coons routinely reviews the claims activity for all of Thomco's programs, including Pest Control Pro. Over the years, the type of incident with the highest average loss amount has been termite treatment and inspection claims. Termite inspection claims require a tremendous amount of investigation on the part of the claim adjustors and usually involve a disgruntled customer. These factors tend to increase the amount of the claim payment or settlement.

What is most surprising about the latest analysis done by Bill is the number and average payout from claims activity involving water. In 2007, there were six claims totaling over $256,000, which is an average payment of $16,062 per claim. Last year, the number jumped to nine claims worth $360,000 and the average payment jumped to $40,062!

The causes of the claims vary, but the leading causes are water pipes struck during drilling (nine incidents) and pipes stepped on and broken during pest inspections and application of pesticides (six incidents). The costlier of the two is stepping on pipes during inspections, where some of the damages exceeded over $100,000 per claim. One of the most severe claims was worth over $200,000. The technician stepped on a pipe in the attic and could not locate the water shut-off valve. Since water follows the path of least resistance, it seeped into the walls, vents, etc.

 


 

 

Water Damage Claims

Thomco Pest Control Accounts

Facts, Figures, Strategies for Claim Reduction 

 

Year                 # Water Damage          Incurred           Avg.                                                                             Claims                                   Incurred

2006                            6                      $52,570           $8,762

2007                            16                    $256,026         $16,002

2008                            9                      $360,555         $40,062

3 yr. Total                   31                    $759,274         $22,37

 

 

 

 

 

 

Cause of Water Loss Frequency
   
Drilling / Punching 9
Stepped on / Broke Pipe in Attic 6
Unknown / Not Reported 5
Damage During Inspection 4
Treatment Non Specific Activity 4
Broke Pipe in Basement 2
Applicance Water Line 1
   

 

 

 

There were two water damage claims over $100,000 incurred both of which involved broken pipes in attics.  One of these cost over $251,000 and the other $142,245.  Both these claims took time to shut off the water resulting in severe water damage in the attic and lower floors as water follows the path of least resistance which is the walls, vents, and attic ladders.

There were three additional claims of significant amounts with incurred losses of $54,803 (attic), $50,000 (attic) and $47,994 (also attic).

 

The next two highest claim amounts are $29,510 (drilled into pipe) and $26,425  (broke pipe during repair.)

 

Incurred losses drop considerably below the $20,000 level with 11 claims valued between $11,000 and $2,000.

 

There were four claims valued between $1,500 and $500.

 


 

Water claim damages can be kept to a minimum by focusing on two critical items:

  • Quickly turning off the water at the main supply.
  • Quickly cleaning up water that has leaked.

Here are some tips on how to accomplish these critical items:

 

  1. Find water main shut-offs BEFORE beginning any work in attics, basements, or drilling.
  2. Check to determine if valves are loose enough to control by hand (not stuck open) or if a tool is required.
  3. If a tool is required, verify you have the proper tool for the job handy and check the valve to determine whether it can be shut off if necessary.
  4. Not all sprinkler system controls and main water supplies look alike. Make sure you have properly identified the location and the correct valve BEFORE beginning work.
  5. Use a stud finder tool before drilling into sheetrock. Water lines will, in most cases, result in a similar signal from the device as a wall stud.
  6. Do NOT drill into sheetrock just because you know where the studs are. If you are not sure there are no water lines behind the sheetrock, confirm their location BEFORE you drill.
  7. When accessing a crawl space, check the direction of pipes with a bright flashlight. Plan the direction you will be traveling so you cross the path of the pipes the least number of times possible. When possible, crawl in the same direction the pipes run, keeping out from under them and not on top of them (if they run along the ground of the crawl space).
  8. When drilling through concrete to access the earth beneath the foundation of a home, drill slowly and stop once soil is reached; going deeper does not improve the effectiveness of the termite treatment and only increases the chances of striking an underground water supply line running from the street to the home.
  9. Consider carrying walking boards into attics that can be placed on the joists so you don't have to always step from joist to joist, which increases the chances of stepping on pipes. Do not place boards over pipes.

 

Please contact Thomco's loss control director Bill Coons at This email address is being protected from spambots. You need JavaScript enabled to view it. This e-mail address is being protected from spambots. You need JavaScript enabled to view it if you would like more details concerning water claim prevention or any other pest control loss control techniques.

 

(888)788-1024 toll free

(972)423-2300 local

(972)759-9781 fax

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NewsFlash!

Superior's Pest Control Policy can include coverage for WDI Reports!

Pest InspectorIf you're having problems finding coverage for your WDI Reports, you're not alone.  Frankly, the reason you have difficulty getting this important coverage is because of the high frequency of WDI Reports claims.  Superior Insurance can colve this problem for you... give us a call for a quick phone quote to see how we can help you.