Personal Finance

Overlooking this risk in your home could cost you nearly $10,000

Key Points
  • Water damage is one of the most common property damage-related claims.
  • The average homeowners’ insurance claim for water damage is $9,633.
  • Nearly two-thirds of people haven’t updated their home protection strategies in the last 12 months.
Henrik Sorensen | Getty Images

A $10,000 threat to your wallet is hiding in your home, and you’re probably doing nothing to address it.

A recent survey from Chubb found that 90 percent of homeowners believe they are “vigilant” or do an “okay” job of protecting their abodes.

The property-casualty insurer polled 1,204 people in May.

Nearly 64 percent of the participants have failed to update their home protection strategies in the last year.

This could be because owners are more concerned about fires, burglaries and other crises, and don’t realize they can fall victim to things like water damage, said Annmarie Camp, executive vice president at Chubb Personal Risk Services.

“Most people think, ‘Oh that won't happen to me,'" she said. "You’re far more likely to have some sort of water loss to your home."

In fact, water damage is one of the most common property damage-related claims, according to Chubb’s report.

Here’s how homeowners are falling short when it comes to preventing water-related losses.

Be aware

PM Images | Iconica | Getty Images

Two out of 10 survey participants said they install pipe insulation, while less than half check their appliance hoses.

And just 40 percent of the homeowners do any water heater maintenance.

Awareness against damage is the best protection, Camp said. Talk with an independent insurance agent who can recommend the best coverage for your specific needs.

Between 2012 and 2016, the average homeowner’s claim for water damage was nearly $10,000, according to the Insurance Information Institute. See the chart below for more details.

Internal water damage can be devastating, said Camp.

The standard homeowner’s insurance policy covers damage related to an accidental overflow of water or steam from plumbing, heating and air conditioning, as well as frozen pipes.

Meanwhile, your homeowner’s insurance will generally exclude damages that stem from a flood. You would need a separate policy for that.

Even if you don’t live in a flood zone, primary flood coverage is a key, but often overlooked coverage to ask about.

Be proactive

Mike Kemp | Getty Images

A few simple steps will help protect your home from water damage.

The first step is learning where your main water valve is, so that you don’t waste time trying to find it if there’s an emergency.

“The number one tip we would give is before you go on vacation, turn off the main water valve to your home,” said Camp of Chubb. “Water damage becomes so much worse when you aren’t there for days.”

More from Personal Finance

Here’s the salary you need to live in the country’s priciest ZIP codes

Don’t be duped by these insurance myths

Good financial habits may not make you rich. Here’s what will

Regular home inspection checks can also prove useful, she added.

Do your own checks seasonally, and consider an annual safety check with a plumber.

Basic maintenance is essential to avoiding a loss, so don’t overlook the small things — such as overgrown trees, clogged gutters or a pipe that keeps leaving a puddle.

“That problem is not going to go away — it’s likely to get worse,” said Camp. “Water will destroy your property, and that means it is very disruptive to your life.”

Investing in technology such as water leak detection devices could save you money in more ways than one.

Your homeowner policies and insurance plans could also be discounted, if companies see that you’re taking steps to protect your home, Camp said.

Be sure to inspect your air conditioning unit and roof for leaks and to prevent serious damage.

“It’s really about the core foundations,” Camp said.