Preventing Water Damage Is A Challenge Agents Need To Help Clients Tackle
Guys just real quick about my background. So prior my family has been around the insurance world since I was a little kid and 20 years ago I had my own water damage restoration company. So I was iicrc certified for water damage remediation, um shout out to Safeco claims who has their own water damage team who is iicrc certified as well and some of their adjusters.
But guys, non cat water damage meaning, you know, non weather related water damage, pipes, slabs, toilets, dishwashers, refrigerators, you name it. Water damage is insanely costly to our industry and it’s insanely disruptive to our clients lives.
Right. And so one of the things that I’ve done over the last uh gosh, probably 15 years and I’ve done it a few times. I’ve aggregated all of our claims data and looked at what is the impact of non catastrophe, water damage on our total claims and without naming any carrier names, I can tell you that over the long history of time. Right?
10, 12 plus years we’ve got carriers where we have, you know, millions of dollars of premium, but we’ve had millions of dollars of water losses right over. If you aggregated the historical view of that. And that’s not unique. That’s not unique to us. It’s not unique to any agent or any carrier, especially here in southern California, where we we uh I used to call orange county, the water damage war zone because we were we were having a run of certain areas and builders that just had such massive issues and these are expensive claims.
So this is a serious problem in our industry. It’s been known forever. It’s gotten pretty acute and on the many councils I’ve sat on with carriers over the years and discussions we’ve had with other agents and other carriers reps and different things. This issue has been talked about and talked about and talked about and so technology has come along the way.
Right? Water damage, water leak sensors are out there. There’s only one device that will actually stop the peril. That’s an automatic water shut off valve. And up to this point, they’re just cost prohibitive, right for the insured to want to take action. And some of the carriers have deals with with vendors and I’m going to share one with mohan and one of our partner carriers that I’m definitely, I’m encouraging all of our carrier partners to please please please please consider being aggressive like this carrier is that I’m gonna be sharing about in just a second with these water shut off valves because I think as agents guys, it’s our duty and obligation I feel to be the front leg, the hands and the feet of the carriers, if you will um with our clients and talking about automatic water shut off valves. Right.
And the best claim is the claim that never ever happened. That’s the best claim. The one that didn’t happen. And I guarantee you for any of you have been personally through a water damage loss and all of the remediation and all the reconstruction, you lose months of your life.
Um, it’s a nightmare. And I personally have been in the middle of those types of restoration things years ago. So my and high level encouragement to both our carrier partners who may be listening and watching this and to the agents who may be listening and watching this, please be proactive with your clients.
Let’s get after the automatic water shut off valves. If you look at the aggregate reduction in total claims, that could happen if we had the majority of homes with automatic water shut off valves and the amount of losses that would be prevented. It’s, it’s potentially staggering.
I’m gonna show you a couple of quick, quick stats here actually. And then I’m gonna show you, I’ll show you the mohan deal with our, our partner carrier. So real quick, if you’re not really familiar with how bad water damage impacts our industry and our, our clients lives, you can see that this is from a property management firm.
Um, you know, so it’s not coming out of the insurance institute or things like that. But bottom line is reading through all of this, even if their numbers are slightly off, uh, definitely you can see that billions of dollars a year are spent on water damage and pretty much any carrier partner you have, if you’re an agent would validate that next to catastrophe or wildfire on the occasional major wildfires that we have here in california.
Water damage is the bane of everybody’s existence, right? So, so that’s what we’re dealing with. And as inflation and lumber and different things like that, we’re only going to see claims severity rise. So it is time to take action, right? This is going to transfer, this is going to, that transitions me, you know, into my props and kudos that I’m going to give out to one of our partner carriers and that’s mercury insurance.
Okay. Um, now again, we have a wonderful set of partner carriers that have different deals and discounts with sensor companies like notion and um, moan and different things like that and they give discounts and all of that. That’s, it’s awesome and I totally down with that and I appreciate that our partner cares have done that with that being said to my knowledge and anybody who watches this and wants to correct me if I’m wrong.
Please do. But to my knowledge, we have not had a carrier yet who has so aggressively subsidized a water shut off valve. Um, and so mercury did a deal. They just announced it last week um, with mohan and typically these systems run anywhere between like, I don’t know, 600 to 1200 bucks, right? Um installed and everything.
So mercury is doing a sweet sweet deal for all of their mercury policyholders and I am encouraging and it did yesterday, all of our agents who work with mercury to talk proactively to their clients about this. Um, so with the moon, you can see here, I’m gonna scroll down, it’s, it’s again, any of you can google this.
Um, you can see what an automatic water shut off valve does and, and the cool stuff that, that, that the technology can enable for the homeowner, the real use case for us is when there’s a water damage leak or a problem that the water gets shut off. Getting alerted is great.
It doesn’t solve the problem shutting the water off is what stops the peril. That’s obviously not rocket science. So here’s, here’s what I want to show you for mercury agents and mercury clients. This is insane. $200 for a standard pipe, right? So, you know, you can see that it will change a bit right if you have much, if maybe you’re on a bigger property, you have a bigger, bigger waterline, whatever.
But the bottom line is, it is insanely subsidized because I think mercury has realized, look, this is a problem in the industry, let’s help our clients prevent losses to begin with. It’s worth it. Somebody’s, we’ve got to, we’ve got to kind of push forward on this. Um, so again, I don’t, I don’t want to be labor this too much.
But this is an area of, of that I’m obviously passionate about because I have personal experience in water damage restoration and I have a long history, almost 20 years in the business. You know, seeing the impact of water damage on our clients and on our profitability and our books of business with our partner carriers and it doesn’t benefit anybody right on our side of the table.
So, you know, if you’re an agent and you work with mercury get proactive, get these things promoted and, and I highly encourage you to get them, you know, get as many of your clients with with them installed as possible, look at a little discount, but more importantly, you know, you’re setting yourself up for a more profitable book of business and if you’re a carrier, who is what might be watching this, I’m just encouraging you, please, like it’s going to take the agents getting their heads around actually talking to their clients and that’s going to be a challenge.
But if you’re a carrier, ah the more you can do to help subsidize and encourage and provide the incentive for the homeowner to take these actions and for the agents to help encourage the homeowners to that. I think collectively we all win. This is a long arduous journey to get to the place where water damage gets blunted by these types of tools with an automatic shut off out.
But if we don’t stop talking and take action, we’re not going to get to the place we want to be.