As water charges have become a hot topic of conversation it is not only Government and lobby groups who have been keeping an eye on the possible implications.
Insurance companies have also been looking at the possible implications and are now seeking to protect themselves from the possible downside.
Up to now if you had a leaking pipe the costs to the homeowner was broadly involved with finding the leak, fixing the leak and repairing any damage caused by the escape of water. The cost of the actual water which escaped was borne by the Local Authority and more recently Irish Water as they are in the process of taking over from the Local Authorities in the area of water provision. Since homeowners/occupiers did not pay directly for water this element of the escape of water loss did not affect us directly. As water charges are now being introduced the homeowner or occupier will have to pay for each litre of water passing through the meter from sometime next year whether it reaches your tap or leaks away.
Under the escape of water peril commonly covered under most insurance policies homeowners making insurance claims could argue that all of the costs incurred as a result of the escape of water should be covered under the policy not only damage to the fabric of the building but also the costs related to the lost water. However many Insurance Companies are now moving to protect themselves from exposure what could be very large claims indeed.
If a relatively large leak were to occur say in the mains pipe leading to your home of say 10 litres (Just over 2 Gallons) per minute and it went undetected for 6 months almost 2600 cubic metres of water would escape at €4.88 cubic metre that would be cost of €12,688.
Some insurers are now imposing limits on how much they will pay for the lost water. A recent RTE News story references how Allianz is to limit their liability to the first €1,000 of water lost while Liberty Aviva and 123.ie are reviewing the situation. A recent RTE News story references how Allianz is to limit their liability to the first €1,000 of water lost while Liberty Aviva and 123.ie are reviewing the situation.
For the policyholder it is important to know what your particular policy conditions are in the event of an insurance claim for a burst pipe.
The full story is available on the RTE website. http://www.rte.ie/news/2014/1111/658354-water/
The implications of water charges in Ireland under review by insurance companies