Home Insurance

Use Data to Identify Policies at Risk for Non-Weather Water Claims

This week is National Fix a Leak Week, an annual campaign hosted by the Environmental Protection Agency. It’s a great time for you to connect with your home policyholders to remind them that checking for and fixing small water leaks can help them avoid claims and save money. It’s also a great time for you as a home insurer to review your book of business and identify any policies that are at increased risk for non-weather water-related claims. How can you do this? Through data analytics, of course.

Costly claims for insurers and homeowners

Over the 5-year period ending in 2019, loss costs for the non-weather water-related peril steadily increased, costing the personal and commercial lines insurance industry up to $9 billion annually. Nevertheless, these types of claims are considered the most preventable of major loss cost events. The most common sources of non-weather water damage include leaky appliances, tubs and toilets, hoses and damaged pipes.

According to the LexisNexis® 2021 Home Trends Report, loss cost and frequency declined a bit in 2020, likely because people were home more often during pandemic-related shutdowns and able to catch leaks early. Many homeowners also took advantage of their time at home to tackle home improvement projects and likely made repairs that prevented water claims.

Your marketing efforts around advising homeowners may include sending emails or flyers to your policyholders. Encouraging homeowners to install smart water leak detectors and automatic shutoff devices can help mitigate risk in this peril. Offering incentives such as discounts and other rewards for using smart devices can result in positive outcomes for homeowners and your business. Imagine, though, if you could target your customer communications to those policies at the greatest risk of a non-weather water claim.

Big data can help prevent big losses

As a home insurance carrier, you know that non-weather water claims are a costly problem. Relying only on your own internal data to determine which household consumers are at risk (or not) can hamper your ability to uncover hidden risk and lead to a potential coverage gap for homeowners, and increased loss cost for you. Our research provides data insights that can help you pinpoint areas of the country that report higher than average losses in this peril, even down to a home address.

By augmenting your data with LexisNexis Risk Solutions’ robust industry-wide data assets, you can gain insights into frequency and losses from claims history, occupant status, property characteristics and other non-weather water-related attributes.

To learn more about how you can use powerful data insights to better select and manage risk, visit our website or contact your account representative today.

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