How to keep clients’ properties dry in all seasons
With water around every corner, clients’ properties are more vulnerable to water damage than many would imagine. In fact, water is the number one property-related homeowners claim, according to Chubb’s claims data, and the Insurance Information Institute found that one in 50 homeowners will experience a related claim each year. When they do, it will cost close to $10,000 per leak.
Despite being both a common and costly risk, a recent Chubb survey of homeowners examining their approach to water damage prevention shows that it’s a threat clients largely overlook. Luckily, agents and brokers can help clients prevent water from damaging their homes, no matter where it comes from. It starts by helping clients understand the seasonal exposures they face.
Ensuring a fun, carefree vacation
Most clients take advantage of the summer to travel with family and friends. Yet too many vacations are ruined as a result of clients failing to take the appropriate water protection steps before departing. Consider that even though many clients ask a caretaker to watch their homes while away, Chubb’s study found that just 30% leave water leak information and only 17% provide information about what to do in the event of a weather-related flood with caretakers.
Why the concern? Time is of the essence when it comes to water damage, with even the smallest leaks or drips building up over time. In fact, the Insurance Institute for Business & Home Safety reports that plumbing supply system failures and toilet failures are the two most common sources of residential water loss. If either of these systems drip for days, the results can be devastating, both in terms of property and financial damage.
Before your clients head out, advise them to:
- Turn off the water supply. This is the only way to prevent a leak from occurring while away; or
- Install a water shut-off device. This is the surest way to prevent wide-spread damage in the event of a leak.
Beyond travel, the warm summer months also provide clients with the opportunity to jumpstart home renovations. But in their desire to drive value, the number one home-related concern identified in Chubb’s study, many clients are inadvertently inviting new water risk into their homes.
Start with encouraging clients to pay close attention to a contractor’s qualifications, prioritizing certifications and licensing above word-of-mouth recommendations. Although both play an important role in the hiring process, Chubb’s study found that 42% of homeowners prioritize the latter, versus 32% who emphasize the former. If contractors don’t have the right experience or professional background, they should not be involved in the client’s renovation project.
Making the most of your time outdoors
Homeowners eager to enjoy the last warm days of the year often spend time working on their gardens, yards and outdoor areas. Many use this time to install sprinkler systems, construct outdoor kitchens and build decks, all designed to enhance their homes’ landscapes. According to Chubb’s survey, close to a third of homeowners (30%) think these types of exterior upgrades most positively impact their homes’ values.
Yet, these projects can quickly let water into all the wrong places. Agents and brokersshould encourage clients to consult with a landscape architect about how enhancements may alter the slope of their garden or clog drains and gutters. Failure to take this into account means new upgrades could redirect water toward clients’ homes, seeping into the foundation or basement over time and potentially resulting in significant damage. By speaking with your clients about their garden renovation projects, this is an expensive loss that agents and brokers can help clients avoid.
Forecasting frozen pipes
Most homeowners know that the pipes in their homes are at risk of bursting during the cold winter months. Homeowners are 40% more likely to have water damage in the winter than any other time of the year, according to Chubb claims data.
Still, only 21% of homeowners report installing pipe insulation, even though it is one of the surest, simplest and cheapest ways to protect exposed pipes in the basement or garage in cold weather. Homeowners might also want to consider hiring a contractor to install pipe insulation for interior pipes that are located adjacent to an outside wall.
Not only does installing pipe insulation help keep the water in a home’s plumbing system from turning to ice and expanding (and thus bursting the pipes), it often helps homeowners save money on their energy bill. In essence, a reminder to install insulation could help clients avoid a major winter headache while also lowering utility bills.
10 tips to prevent chimney fires
Proper home maintenance requires constant vigilance.
Chimneys, in particular, require upkeep. A chimney that is dirty, blocked or in disrepair can inhibit proper venting of smoke up the flue, and can also cause a chimney fire. Nearly all residential fires originating in the chimney are preventable, according to the New York State Homeland Security and Emergency Services.
Chimney fires account for 75% of home heating fires, meaning homeowners should actively monitor their chimneys. Homeowners looking to avoid damage to their property and increased premiums should prepare for fires by checking their smoke alarms and updating their emergency plan.
The Chimney Safety Institute of America recommends looking for these signs of a pending chimney fire: a loud cracking and popping noise; a lot of dense smoke; or an intense, hot smell.
Why is SERVPRO concerned about creating community awareness regarding cyber attacks and cyber security? The more our world becomes connected to the internet the greater the risk for property damage. Consider the following scenarios:
- Hackers gain access to a steel mill via a phishing attack introducing malware to the control system that prevents the shutdown of a blast furnace causing massive damage.
- A power grid is remotely disabled by hackers causing extensive power outages.
- Using a homemade transmitter, a teenager trips rail switches and derails train cars.
- A hacker infiltrates the computerized waste management system and deliberately spills millions of gallons of raw sewage.
- Machines at a hospital are infected by malware and a remote-access program is installed on the hospital's HVAC system. This jeopardizes patient safety by putting drugs and other medical supplies at risk by altering the heating, AC and ventilation systems.
Sound like science fiction? They are all true incidents and it is predicted that as the IoT (Internet of Things) continues to expand, property attacks will become more prevalent and costly. Imagine hackers gaining access to the freezer temperature control at a frozen food manufacturer or infiltrating the computer system that regulates the fire sprinkler system in a large hotel. The focus on cyber security and providing appropriate cyber coverage for commercial customers is not only important to protect data but also to protect vital system functions. Hackers have only scratched the surface when it comes to property damage so it is important to educate yourself about cyber risks before a catastrophic incident occurs.
Vacant Homes and Mold Growth
Vacant homes or unattended homes have unique issues that can that increase the likelihood of mold growth. These homes are locked up without inhabitants coming or going, turning on the heat, running air exchangers or ventilation fans, and have restricted air flow. Thus moisture or condensation can build up inside and create an ideal climate for mold. To thrive mold needs moisture, oxygen, a food source and a surface on which to grow; easily available within a residence. Mold spores are abundant in our environment, and once a mold spore has attached itself to dust particles, which provides the nutrients needed, all the spore needs is moisture.
Procrastinate where mold cleaning is necessary can be a costly decision. If mold spores are allowed to proliferate, you may be faced with extensive structural damage to your home and possibly loss of property value. Today’s buyers are very leery about investing into a home with visible mold contamination. Additionally, consumers are very aware that some molds species can produce toxins and allergens.
The remediation priority would be to correct the excessive of moisture build up in the residence. Remediation would include 1) water proofing, 2) corrective measures to secure windows and doors, 3) create healthy air flow. etc. After the corrective measures to reduce the moisture, professional mold remediation of all affected structural materials, contents, and HVAC system would need to be completed. If the issues that are causing the elevated moisture are not corrected prior to remediation services, after a period of time, the home would again become unhealthy.
If you determine that your home or business has a mold problem, and the source of the moisture intrusion has been corrected, SERVPRO of Canton can inspect and assess your property. If mold remediation is needed, we have the training, equipment, and expertise to handle the situation.
Evaluating Mold: Air Sample Testing
All buildings contain mold spores since they a natural part of the environment. An elevated mold count especially one that contains spores from varieties of mold that are commonly found when water damage is involved, such as stachybotrys chartarum, can indicate that there may be a structural moisture problem.
In the insurance claim process, mold testing in is generally utilized after the mold has been remediated to confirm that the mold spore count is at or below the count found outside the building. The test is conducted while the remediated area is contained in order to confirm the success of the cleaning process.
Determination of airborne spore counts is accomplished by way of an air sample, in which a specialized pump with a known flow rate is operated for a known period of time. Conducive to scientific methodology, air samples should be drawn from the affected area, a control area, and the exterior.
The air sampler pump draws in air and deposits microscopic airborne particles on a culture medium. The medium is cultured in a laboratory and the fungal genus and species are determined by visual microscopic observation. Laboratory results also quantify fungal growth by way of a spore count for comparison among samples. The pump operation time was recorded and when multiplied by the operation time results in a specific volume of air obtained. Although a small volume of air is actually analyzed, common laboratory reporting techniques extrapolate the spore count data to equate the amount of spores that would be present in a cubic meter of air.
If you have questions or need further information about the mold testing process, contact SERVPRO of Canton at 800-648-1212.
How to determine if I can handle the mold clean up in my house?
Do I need a professional mold remediation company?
Firstly, the source of the water intrusion needs to be resolved. If the source continues to allow water intrusion, the home will eventually return to an unhealthy condition.
You might want to consult a mold remediation company….
- If the visible mold spores affected area, from tip to tip, is larger than a 10 square foot area
- If you suspect that the heating ventilation system may be contaminated
- If the original water was from a black water source (sewage contamination)
- If you have health concerns of the occupants
There are numerous mold cleaning products on the market for consumer use. It is best not to use OVER USE any harsh chemicals. Simply scrub hard surfaces with a detergent and water, and let the area dry. It is very important to use personal protective equipment while cleaning: eyes, hands, and respiratory system. Upon completion of the cleaning, the area should be free of visible mold spores and musty, moldy odors (mold staining on structural materials may still be present). It is critical to monitor the affected area for a few months to make sure the area does not return to unhealthy. The area needs to continue to be dry, clean and odor free. If the area again begins to deteriorate, go back to correction of the source of water intrusion. It is possible that the original correction was not sufficient or there might a secondary source of water intrusion.
If you determine that your home or business has a mold problem, and the source of the moisture intrusion has been corrected, SERVPRO of Canton can inspect and assess your property. If professional mold remediation is needed, we have the training, equipment, and expertise to handle the situation.
Lack of flood insurance heaps misery on homeowners slammed by Hurricane Florence
The drenching rains and massive flooding caused by Florence are expected to inflict a high financial toll on homeowners in North Carolina and other states, as only a small percentage are covered by flood insurance that could help offset the costs of rebuilding their damaged homes.
An estimated quarter of a million homes in North Carolina are projected to be affected by Florence, which has caused flash flooding and record rain amounts across the state, according to CoreLogic, a property analytics company.
Estimates from insurance analysts and actuaries show an alarmingly high percentage of homeowners – both in coastal towns and those far inland – that are underinsured for a water-driven natural disaster as destructive as Florence.
Only 10 percent to 20 percent of coastal homeowners in the hard-hit eastern part of North Carolina, for example, have coverage through the government’s National Flood Insurance Program (NFIP), and only 1 percent to 3 percent of homes in inland counties have flood policies, according to estimates from John Rollins, an actuary at consulting firm Milliman. Statewide, roughly 3 percent of the homes in North Carolina have flood coverage and 8 percent of homeowners are covered in South Carolina, Rollins said.
“Obviously, that leaves a lot of people uninsured,” Rollins told USA TODAY.
The numbers of those covered are low, he said, because people think that because their home isn't in a high-risk zone designated by the government that there's "zero risk" of a flood. "But that's not true," Rollins says. Many also don't realize their basic homeowners policy doesn't cover flood damage, while others overestimate the disaster aid they will get from the government.
Unfortunately, standard homeowners insurance won’t cover any flooding-related issues. The estimated insured losses from Florence are in the range of $3 billion to $5 billion, according to CoreLogic. Goldman Sachs, a Wall Street bank, said they could go as high as $10 billion to $20 billion.
Insurers should have no problem being able to pay out claims to policy holders because the industry has cash reserves of roughly half a trillion dollars, according to Matt Carletti, senior insurance analyst at JMP Securities.
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The problem for homeowners is that insured losses generally are only about one-third of total economic losses, which puts them on the hook financially for a more sizable part of their home rebuilds if losses are due to uncovered flood costs, Carletti said.
To get flood coverage, homeowners must buy a separate policy. Most purchase this extra coverage from the government-backed NFIP program, which is designed to restore your home to its preflood condition and replace your possessions. NFIP policies, which carry average premiums of about $600 to $700 a year but can run into the thousands of dollars in high-risk zones, cover up to $250,000 for a home's structure and up to $100,000 for personal possessions.
Homeowners not covered for flood damage can seek federal disaster assistance in the form of grants from the Federal Emergency Management Agency or apply for a loan from the Small Business Administration, said Steve Bowen, meteorologist for Aon Benfield's Impact Forecasting division. FEMA may provide up to $33,000 in assistance for home repair, although the average for Superstorm Sandy in 2012 was about $8,000 and roughly $7,100 for Hurricane Katrina in 2005.
At the end of July, there were 134,306 active NFIP flood policies in place in North Carolina, Bowen said. That's only 3 percent of the estimated 4.62 million housing units in the state, he said, citing U.S. Census Bureau data.
Damage to homes caused by floods tend to be costly. The estimated potential loss for a 1,000-square-foot, single-story home with possessions worth $20,000 that is inundated with just 1 inch of interior water can run as high as $11,000, according to FEMA data, and the estimated loss for 5 inches of water climbs to more than $18,000.
Given the fact that many parts of North Carolina have received rain totals of 2 feet or more, many homeowners will be facing high rebuild costs they may not be able to afford.
“You are looking at a lot of homeowners that will have out-of-pocket costs that could easily be five figures, or more than $10,000,” said Cathy Seifert, an insurance analyst at CFRA, a Wall Street research firm.
Insurance coverage for drain, sewer and sump pump problems
Analysis brought to you by the experts at FC&S Online, the recognized authority on insurance coverage interpretation and analysis for the P&C industry. To find out more — or to have YOUR coverage question answered — visit the National Underwriter website, or contact the editors via Twitter: @FCSbulletins.
Question: This is a Commercial Property risk. I have a toilet that continued to run as the toilet stopper did not seal properly. All would be fine except the heavy rains saturated the drain field not allowing the water to drain from the toilet. This resulted in an overflow causing damage.
The insured has a $10,000 limit on discharge from sewer, drain, or sump from a CP 73 51 endorsement.
Does this limit apply or would it be considered a loss under the normal limits? But for the saturated drain field, there would be no loss. The drain field caused the water to not be able to drain properly; is that a back-up by definition?
— North Carolina Subscriber
Answer: Endorsement CP 73 51 is a proprietary endorsement that includes additional coverage for Discharge From Sewer, Drain Or Sump (Not Flood-Related), up to a $10,000 limit in the endorsement. This response is in regards to the water damage claim submitted for our review. Here are the facts as presented:
- A toilet ran continuously due to a stopper that did not seal properly. The toilet overflowed.
- The drain field overflowed due to heavy rains.
- The drain field is tied to the septic system serving the insured property.
Based on these facts, there are two causes of loss, and we cannot determine the extent of damage from each cause of loss:
- What caused the toilet stopper to not seal properly? Was it wear and tear or faulty workmanship? What interior water damage resulted from the toilet overflow?
- What caused the drain field to overflow? Despite heavy rains, it should still have absorbed the water. So what factors may have contributed to the drain field overflow? Was sludge or other obstruction a contributing factor? What interior water damage resulted from the drain overflow?
This is not an expert opinion, just personal experience with a broken toilet flapper. Regardless of how much the toilet ran, it never ran outside the toilet bowl because the drain carried out the water. If the drain was stopped up, not allowing the water to flow through the drain, then the water could back up and out from the toilet bowl, causing interior water damage.
If the water damage was caused by the broken toilet seal, there would be no coverage.
If the water damage was caused by the drain field overflow, then there would be limited coverage of $10,000 for Discharge From Sewer, Drain Or Sump (Not Flood-Related) provided in the proprietary endorsement CP 73 51.
However, this is an issue of fact, not coverage. We can only speak to the coverages that would be provided in the forms based on the two causes of loss as presented.
Washing machine overflow
Question: Our property coverage contains an exclusion for flood. Included under the flood definition is the exclusion of water or sewage that backs up through sewers, drains or sumps. It also excludes overflow of any body of water.
We have a claim where the fire department put a load of clothes in the washing machine and was called out on a run. During the washing cycle, water overflowed into the building due to the drain being frozen from an ice storm. This was while the firefighters were gone performing their duties. When they returned, the building was flooded, damaging carpet and sheet-rock. Is this covered?
— Oklahoma Subscriber
Answer: We do not see an exclusion that would apply in this situation. It doesn’t sound as if the water actually went down a drain and then backed up. The washing machine overflowed because water could not go down the frozen drain, which would not constitute a backup. So, in our opinion, the loss is covered.
Sump pump and water backup
Question: One of the more common claims we handle deals with sump pumps and applicable exclusions. In this case, the business owner’s policy contains the following provision, “We will pay for loss or damage to covered property caused by water that backs up from a sewer or drain, subject to the following limitations: We will not pay for loss or damage under this Additional Coverage caused by the emanation of water from a sewer or drain that itself is caused by, or is the result of “flood,” surface water, waves, tides, tidal waves, overflow of any body of water or their spray, all whether driven by wind or not;”.
Carrier issued a denial, as follows:
In view of the cited exclusions, the water damage to the basement is the result of flood and groundwater; therefore, we would not make a payment for this loss.
The loss was not caused by flood or surface water, but a high water table that overwhelmed the pump’s capability to function due to two major rain events one year ago. When the water table receded, the pump functioned so it was not failure in the sense one thinks of failure, i.e., mechanical or electrical. Water entered through the sump, through some cracks in the floor.
My belief is that this is a covered loss. I could not find any information on the definition of “sump pump,” the purpose of a sump pump, or the definition of “groundwater.”
The carrier used the term “groundwater” in the denial. That is not addressed in the endorsement.
— Connecticut Subscriber
Answer: It does not sound like the water backed up through the sump pump but in fact came through the cracks in the floor.
This type of loss would be subject to the part of the water exclusion that states, “Water under the ground surface pressing on, or flowing through… floors… basements.” (This can be seen in the ISO BP 00 03 01 10, B.1.g.) If the insured has purchased sewer and drain backup coverage, it would not apply to this type of loss. However, if it can be shown that the water really did overflow or was discharged from the sump (as opposed to seeping in through floor cracks), that would be covered.
The ‘whys’ behind lack of flood insurance coverage
One of the ongoing issues with hurricanes and other flood disasters is the fact that many, many people lack flood insurance. But why is that? Why are people not buying the coverage they need?
The Private Risk Management Association (PRMA) conducted a survey of agents about why their insureds do or do not carry flood insurance. We had the chance to talk to Lisa Lindsay of PRMA about the study and its results.
Their study showed that across the board, whether high net worth or not, people’s mindset is that “It won’t happen to me.” Flood insurance is seen as something homeowners are required to have, not something they need to protect their assets. The study showed that many people only buy flood insurance because the bank says they have to. They later celebrate when they’re no longer required to hold flood insurance because their mortgage has been paid off.
Likewise, consumers have been conditioned to believe that unless they are in a high-hazard flood zone, coverage is not needed. The fact that flooding occurs in many non-high hazard areas is overlooked. It’s not just coastal areas that flood, but areas near rivers, streams and even low-lying areas in towns where runoff can accumulate often flood, causing unsuspecting homeowners damage that’s not covered by their normal homeowners’ policy.
Better understanding of mitigation efforts
Not only do people need a better understanding of flood insurance, but they also need a better understanding of mitigation efforts, that is, steps they can take to prevent or minimize flooding and reduce the potential damage. Sandbags, inflatable barriers and landscaping are just some ways people can prepare for a flood. Both the National Flood Insurance Program (NFIP) policy and the new ISO Personal Flood Policy provide up to $1,000 for steps taken to protect the insured building from flood or imminent danger of flood. The $1,000 is provided for the cost of:
- Sandbags and sand to fill them,
- Fill for temporary levees,
- Plastic sheeting, and
- Lumber used in connection with these items.
As most insureds don’t read their policies, it’s likely that most are unaware of these coverage benefits for mitigation of damages.
Private flood policies to the rescue?
With the concern surrounding the National Flood Insurance Program (NFIP), carriers are beginning to issue private flood policies. For example, one carrier has a private flood policy with limits up to $15 million on property, much higher than the NFIP limits of $250,000.
ISO has developed both a Commercial Flood program and a Personal Flood program, both available this year. The expansion of available coverage should be a tremendous help in getting homeowners insured. However, education of agents and the public is key.
Better analytics is helping to make private coverage possible; instead of just referring to the standard flood maps, which may be out of date, there are companies providing better analysis of property that includes rainfall, local topography, elevation and susceptibility to hurricanes, not just for rains but for winds and storm surge as well.
Although flood insurance can be expensive in some places, in many areas that’s not the case. As a result, property owners don’t investigate their options for coverage.
Another issue is construction itself. Builders resist changes to codes to make properties safer while continuing to want to rebuild in areas that have been flooded. If building is going to occur in such areas, the buildings need to be built in a way to protect the property as much as possible from flooding. People also get a false sense of security from the fact that the town has allowed buildings to be constructed in low-lying areas, figuring that if zoning approved of the area it must be safe to construct a home in that area.
Understanding the 100-year flood
Yet another large issue is the misperception of the 100-year flood. Many people believe that this means that the chance of their property being flooded is one in 100 years. What it really means is that every year there is a 1% chance of flood. This puts the property at significant risk, as not only do 100-year storms need to be accounted for, but other storms as well.
Time Period10 Yr.25 Yr.50 Yr.100 YrTotal Odds1 yr.10%4%2%1%17%10 yr.65%34%18%10%127%20 yr.88%56%33%18%195%30 yr.96%71%45%26%238%50 yr.99%87%64%39%289%
Source: FC&S Online
The overarching issue is how to educate both the public and the industry on flood mitigation techniques and the availability of insurance coverage. The industry needs to inform people of not only what their risk is but also about the available risk evaluation tools, mitigation techniques and available coverage. Agents and brokers need to be well informed in order to proactively change the narrative of flooding and coverage.
It's Your Business: Fire Prevention & Recovery
What If a Fire Strikes?
Despite everything, a fire can strike. Being prepared will help reduce its devastating effects. The first few minutes following a fire are the most significant; any inappropriate action or inaction at this stage can have far-reaching consequences. Just as the appropriate first aid applied immediately after of an accidental injury can save life and promote rapid recovery, the correct response to a fire can keep effects minimal.
When a fire occurs, notify the fire department, the police department, and the insurance company. Next, call a disaster restoration company to help prevent further damage. Because fire departments usually do not recommend specific disaster restoration professionals, a business should reference its contingency plan or contact its insurance company immediately to ascertain the restoration company to call, and then work with that company to minimize damage and business interruption.
By evaluating the materials and surfaces affected, a disaster restoration company can provide an understanding of the fire's chemistry and allow for a targeted, informed restoration effort. Even though each fire's chemistry differs, one of the most important things disaster restoration companies do immediately is wipe down the affected areas to avoid further damage caused by humidity and acidic residues. They will use air scrubbers, which are highly filtered air machines, so soot particles will not recontaminate air and will limit redistribution of contaminated particles while restoration work continues. They will pull all filters from the HVAC system, clean and recondition the system, and then install new filters.
A fire can involve well more than 100 chemical elements. A fire at a business is usually a complex fire, the result of incomplete combustion and fueled by synthetic materials, including those found in carpets, furniture, plumbing, and other equipment. Complex fires cause the most damage and leave the most waste, but disaster restoration professionals can professionally handle the cleanup and restoration.