Water damage prevention: how well do you know your insurer’s requirements?
Water damage protection has generated a lot of buzz amongst condominium owners in recent years. Condo corporation members are faced with a great responsibility in that regard; they need to protect individuals and their condominiums, as well as the building and the self-insurance fund. This article guides syndicates of co-owners in their duty of informing owners and in choosing the right prevention system. This edition focuses specifically on the insurer’s perspective.
Why you need a prevention system… according to insurers
Recently, we published an article on the need for a water leak detection and control system for condominiums.
Many owners still question why they need to have a water damage prevention system installed when they already have insurance. What’s the point of installing a system like that if the insurer’s going to pay for the damage anyway? And why pay for insurance if owners are repeatedly told to avoid filing claims at all costs?
Well, the system’s main goal is prevention. Let’s be honest: even with insurance, no owner wants to experience water damage. Endless red tape, renovations, deductible payments, contingency fund replenishment, and other inconveniences… It’s quite a headache. In the eyes of your insurer, your insurance is there to protect you financially in case the unexpected happens. It’s in its best interest to keep claims down as much as possible. Remember: an insurer is a risk management company. Jean-Hugues LaBrèque, president and CEO of NOWA, explains:
An owner buys insurance to limit their financial risk. The insurer also wants reassurance when it comes to that risk. When insuring a client becomes too risky, the insurer either raises the premium through the roof or deems the building uninsurable. The syndicate of co-owners’ job is to avoid putting the building’s insurability at risk.
A water damage protection system is therefore a big plus for insurers. In fact, sometimes they even require it.
Should owners and syndicate of co-owners reflect on the insurer’s requirements? Absolutely! What their insurer requires should be the focus of their attention.
After all, isn’t the goal to lower your insurance premiums and deductibles? If insurers are willing to lower these costs, chances are they’ve done their homework and identified which system manufacturers are trustworthy. To guide you in your choice of a water damage prevention system, let’s have a look at the criteria insurers want.
An established company
The water damage protection industry is still emerging. There are certainly some successful companies out there, but plenty don’t stay around for the long haul. Not all water damage protection products are trusted by insurers. They believe in technologies from companies that have proven their strength over several years. When receiving product proposals, inquire about how long the system manufacturer has been in business. Know the difference between the installer and the manufacturer. And determine how many generations of products the manufacturer has brought to market. That will give you an idea of how much effort it’s invested in product development.
A PREVCAN-certified product
Are you familiar with the Water Damage Prevention Association of Canada (PREVCAN)? It’s an independent organization whose goal is to inform the public about existing solutions, and work with casualty underwriters and government authorities. Jean-Hugues LaBrèque states:
PREVCAN’s credibility has been recognized by major insurers for several years. In fact, the majority of insurers now require that the prevention system be PREVCAN certified. If it isn’t, you could be considered under-protected and may not be offered lower premiums and deductibles.
Take into consideration the insurer’s preference and don’t hesitate to ask the manufacturer for proof of certification. Again, make sure to distinguish the manufacturer’s brand from the installing company.
A network of recognized installers
Now let’s talk about installation. In most cases, installers are more than just installers; they also provide after-sales service. However, installation quality standards can vary widely from one manufacturer to the next. Insurers will always recommend manufacturers backed by a strong network of installers. Even better if the installers have followed a training program or obtained certification. Find out about the requirements for your building type. The installer you’re considering may not be suitable. Most importantly, check that they have the necessary liability insurance.
Products made in Canada
Designed in Canada, developed in Canada, tested in Canada… That’s all well and good, but is the product made in Canada? Not necessarily. Many Canadian companies offer products that are developed here but manufactured in China or elsewhere in Asia. This means that quality control is not conducted by the company selling the system. Considering the importance insurers place on system reliability, rest assured that Canadian-made products will always be preferred.
Monthly and annual reports
Many insurers already require monthly and annual activity reports. It’s only a matter of time before it becomes the norm. The reports provide insurers with a list of recorded activities for all building systems, which allows them to confirm the systems are still functional and informs them of anomalies and the frequency of events. Make sure the system you choose provides monthly and annual activity reports, and that they contain all the information requested by insurers.
In short, it’s in your best interest to have a water damage prevention system to limit your financial risk, make sure your building is insurable, and lower your premiums and deductibles. When you’re choosing a system, be aware of the qualities insurers seek out in a prevention system, i.e., PREVCAN-certified Canadian-made products from established companies with a strong network of installers who make regular activity reports available to them. These criteria are highly reassuring to insurers because they’re proof of the product’s credibility and quality.
