I write this blog with a bit of passion, because I am one of the few insurance brokers with first-hand experience of cleaning up coop, condo, home, and businesses. AND trying to bill for water damage insurance to the insurance companies for the damage! Yes, yours truly has done his fair share of water cleanup when I was in the property restoration business.
Imagine being sound asleep and the phone rings at 2 a.m. on a Friday night (i.e., Saturday morning)…“Help, my brand new NYC condo is flooding with water!” So I got on the subway, went to Queens, where my truck was parked, and drove into Brooklyn to the client site. And yes, it is literally impossible to park a truck in Brooklyn at 3:30 a.m. – but that’s a whole other story!
My teammate and I spent the entire night cleaning up water from a new high-end condo. The cause of loss, you ask? A “designer” shower overflowed – a classic case of condo water damage.. The property owner was shocked – just another day in my life.
Over the next 10 days, my team and I worked tirelessly to restore this beautiful property. Unfortunately, when the bill came, their insurer declined to pay. We were “nice guys” and gave our client a deal since they had to pay out of pocket. That said, most contractors won’t be that nice to you on a water damage insurance claim.When handled properly, Water damage insurance can protect not just your home but also your neighbors’ properties, especially in shared buildings like co-ops and condos where one leak can impact multiple units. Understanding the fine print of Water damage insurance coverage is crucial before a loss occurs.
Common Myths and Surprising Facts About Water Damage in homes
The truth is that water is the most frequent cause of loss in properties. Most co-ops, condos, and homeowners will experience water damage in homes at least once in their lifetime. And did you also know that many insurance policies do not cover water damage insurance claims completely? Why would they, when it is so common? This is why it is extremely important to understand how water damage exclusion clauses are treated in your policy UPFRONT, for the treatment of water damage in homes, so there are no surprises when (not if) you have water event damage in one of your properties.
People often say things like “My property is new…I don’t have to worry about water damage in homes.” Or “I live in a condo or coop, so I don’t need to worry about condo water damage insurance.” These statements are simply not true. The fact is, most people do not have the pattern recognition to truly understand the complexities and frequency surrounding water damage.
For U.S. homeowners, there are more than 14,000 water claims every day, accounting for about 30% of all property insurance claims:
- leaky toilets,
- dishwasher overflow,
- discharge from refrigerators,
- leaky pipes,
- showers,
- floods,
- heavy rains,
- water from a neighbor, etc.
These can all happen to any property, whether new or old. In fact, according to the Utah Water Research Laboratory:
- About 1 out of every 5 pipes needs to be replaced
- Every year, there are 11.1 pipe breaks for every 100 miles of piping
FLOOD INSURANCE and WATER DAMAGE EXCLUSION – What You Should Know
I’ll write more about floods in another blog, but here’s a fun fact: 99% of all U.S. counties were impacted by a flood event since 1996. Also, many flood losses do not occur in high-risk flood zones and are caused by the accumulation of water in other ways. Think of heavy rains, which often do not meet the government’s official definition of a flood but still cause significant damage to properties. In most policies, water that enters the home from the outside will generally be excluded, as that is usually the realm of flood insurance. And even when the source of water is from the interior of the property, policies often have caps or water damage exclusion clauses. All of the above also holds true for commercial property & business water damage. In fact, commercial business premiums in the U.S. exceed those of homes, which makes the water damage insurance risk even more acute for businesses.
Best Water Damage Insurance for Condos, Co-Ops, and Homes: Why Chubb flood insurance Stands Out
I stress the importance of understanding the treatment of co-ops, condos, and water-related losses on your insurance policy, along with any conditions they may impose to cover the loss, upfront. Furthermore, there are only a few companies that will provide comprehensive treatment of water related damages. One recommendation for condos, co-ops, and homes is Chubb. Not only do they have a great home/coop/condo water damage insurance policy, but they can also supplement it with their own chubb’s flood policy, which is far better than the highly restrictive government policy.
Many people do not realize that most insurance policies, which are white- labeled and marketed by insurers you may recognize, are issued by the government and are pretty vanilla and do not adequately cover most properties. Chubb insurance offers a customized policy for both the main home/coop/condo water damage and flood coverage – a true game changer for anyone seeking the best water damage insurance for their property.
I hope this helps. Stay safe, and feel free to reach out if you have any questions!
-Seth Patel
April 20, 2025
Wall Street, NYC
Founder & CEO of Prana Risk
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