Escape of water is one of the most frequent and costly perils facing UK residential property owners and landlords. The scale and complexity of claims is also growing due to a combination of ageing infrastructure and modern open plan layouts, which makes it easier for even small leaks to lead to widespread damage.
According to the Association of British Insurers (ABI), insurers pay out around £1.8 million every day for damage caused by escapes of water, making it one of the most expensive categories of household claims in the UK. Compared to five years ago, when average escape of water claims were typically in the £2,000–£3,000 range, many insurers now report average spends of closer to £5,000-£10,000 per incident. This escalation reflects inflation in building materials and labour as well as higher specification finishes and longer drying and remediation times.
The financial consequences of the escape of water extend far beyond the immediate damage.
Damaged belongings, health risks from damp or mould and the upheaval of temporary relocation can erode trust in landlords and managing agents. This can lead to early lease terminations and increased tenant churn. For landlords, lost rental income during a repair period can compound the financial strain. All the while, you could face reputational damage if tenants perceive poor property management.
At Willis, we’ve seen insurers respond to the surge in escape of water claims with tightening terms. We’ve also seen some residential property businesses face higher premiums, particularly for portfolios with a history of water damage. Many insurers now impose elevated excesses specifically for escape of water incidents.
Stricter underwriting is also becoming the norm, with insurers increasingly requiring evidence of proactive risk management. Failing to manage escape of water risks proactively can result not only in higher claims costs but also in escalating premiums and reduced insurability. You may need to consider installing leak detection systems and evidence regular plumbing inspections.
It's important not to underestimate the hidden costs of the escape of water. Your insurer may cover alternative accommodation for displaced tenants, but the logistical and reputational impact on your business can be considerable. Tenant churn, void periods and additional re-letting costs can quickly accumulate.
You can face an increased workload in coordinating repairs, liaising with insurers while managing tenant expectations. In some cases, these indirect costs outweigh the direct financial settlement of the claim itself.
Investing in technology, such as leak detection sensors, automatic shut-off valves and smart monitoring systems can significantly reduce both the frequency and severity of any escape of water claims.
Preventive maintenance, including regular inspections, pipe lagging and system upgrades can also reduce your vulnerabilities, as can educating residents on early warning signs and reporting procedures to accelerate response times and limit damage.
If you’re a larger landlord or managing agent, you can develop portfolio-wide strategies in collaboration with your insurer and broker to mitigate escape of water risks more effectively.
By working closely with your broker during renewal discussions, you can get a clearer understanding of your exposure and coverage. Ask to review your recent claims experience, with specific commentary on any escape of water incidents. Look for patterns, such as repeated radiator leaks across a building, which may indicate a systemic issue.
Clarify your current escape of water excess on your property damage policy. If it’s set at a higher level, ask for the rationale behind it, which could highlight areas where your insurer perceives elevated risk and where targeted mitigation could make a difference.
For more insight and understanding around your exposure and coverage, get in touch.
