Water damage is one of the single largest causes of home insurance claims in Canada. Insurance industry experts attribute about 40% of claims to water-related losses, with recent years being especially difficult — mainly in Alberta. Both 2023 to 2024 saw record insured losses from severe weather nationally, with Alberta being one of the hardest-hit provinces for extreme weather insured losses.
The Canadian government’s Flood-Ready site notes the average cost of repairing a flooded basement in Canada at more than $43,000. In 2004, the average residential water damage claim was about $11,709, according to the Canadian Underwriter. By 2014 that number had increased to $16,070 and has risen exponentially since.
A large portion of Canada’s water and flood claims are caused by extreme weather, which often leads to sewer and drain backups, plus overland flooding, and roof or exterior envelope failures.
Other common water damage claims reported by insurers include indoor plumbing failures, such as burst pipes, leaking fittings, and appliance failures.
All of this works to increase costs for both homeowners and insurance companies, and those in the industry are keenly aware of the water damage issue. That’s why there is a continued push for the adaptation of new technologies that can help prevent problems before they start.
Enter the smart water monitor
Appliance and fixture companies are introducing ways to help reduce water-related losses, and one is through smart water monitor and shutoff devices, says the Canadian Underwriter. MOEN, a manufacturer of plumbing products, has developed their own smart water monitors, which Jerry Fairborn, national sales manager, says can help stop damaging leaks and reduce overall water consumption. Some send critical alerts through smartphones and can be programmed to shut off water quickly if the owner does not respond to alerts.
Fairborn says a business case can be made for the “strong correlation” between owning a shutoff device and not having made a water damage claim. MOEN company data shows that after installing their device, 60% of homeowners realize they have a leak somewhere in their home within 24 hours.
Proven benefits
Studies have shown that two in five Canadian home insurance policyholders will have a water damage claim at some point in their lifetime, which points to the advantage of water protection devices.
In 2019, MOEN provided 2,300 homes in the southwest U.S. with their water monitors, with results showing a 97% reduction in any water damage. They also say that the severity of reported leaks was reduced by 71%.
Some U.S. states actually require homeowners to install a water protection device to mitigate claims due to the creation of “insurance deserts.” These are areas where insurers have either greatly reduced or stopped offering coverage altogether.
Fairborn suggests that Canada should consider smart water monitors mandatory for homes with plumbing systems of a certain age and of types (such as PVC) that have a higher propensity for leaks.
Smart water monitors can also be very useful for cabins or seasonal homes that are not occupied all of the time. These sorts of properties can be very expensive to insure, especially if someone is not checking on them all of the time.
Tech prevention at a glance
High-tech smart water monitors can monitor and protect homes from leaks and water damage with just a single smart water valve. These are installed on the main water supply line of the home, and you can see live water use, including water flow rates, pressure and even temperature, meaning the device may soon pay for itself through saving on water usage.
If the smart water monitor detects an issue, such as high pressure, freezing water, or a small leak, it will alert homeowners through its app so it can be fixed before causing damage. In incidences of catastrophic failure, like a burst pipe or someone leaving the water running, homeowners can shut the water off wherever they are.
In addition to smart water monitors, the insurance industry is eying additional ways that technology can help lower the amount of claims and lessen insurance costs for everyone. Artificial intelligence is showing promise at stopping hackers in their tracks. Big data is allowing insurers to better understand where claims are most likely to originate, also known as risk intelligence. And they are keeping their eye on future risks such as bioengineering and nanotech.
Trust Lane’s to always be ahead of the curve
As insurance brokers, it is our job at Lane’s to be well aware of changes and developments in the industry that will affect our clients and their coverage. We are always watching for ways we can offer the very best insurance packages at the very best price available. We work for you, not the insurance companies, which means we can access a number of different policy options from different providers, not just one option from a single company.
We are pleased to serve homeowners and business owners throughout Alberta. Use the following regional links to contact us to see what we can do for you:
- Our Calgary office
- Our Edmonton office
- Our Banff office
- Serving the rest of Alberta
