Water Damage Is Now the Leading Cause of Loss in Multifamily. Not Fire.

Water damage is now the leading cause of loss in multifamily buildings. Not fire. Water.

Jarrett is in the insurance business full time, and he sees it from the inside. In his words: "In multifamily, it's not fire loss that's the leading cause. It's water damage in vertical buildings."

What Carriers Are Doing

Carriers are reacting. They are raising deductibles specifically for water lines. And some carriers won't write a policy unless the property has a water management plan in place.

That puts pressure on a common belief: insurance covers water damage, so monitoring is a nice-to-have. That belief is getting harder to hold.

What a Water Management Plan Changes

Here is the other side of it, again in Jarrett's words: "When we put automatic shutoffs in and we have a water management plan, all of a sudden I can negotiate much better terms and conditions and pricing on commercial insurance spend."

That is the thinking behind PhantomH2O. Monitoring at the main line with automatic shutoffs and a water management plan, so both the damage risk and the cost risk become visible.

Two Water Risks, Both Easy to Miss

Dan Prescott frames water as two risks. Of the risks a property has, water is the biggest property damage risk. It is also an invisible, unbounded cost risk.

Take a toilet running 300 gallons an hour because the flapper didn't close. There is no property damage. It is invisible water loss, but the cost risk is unbounded. Without the system, you have no visibility into either one.

The damage risk is the one that makes the insurance call. The cost risk is the one that quietly runs up the bill.

New Construction Raises the Same Question

Jarrett also points to new builds. On a builder's risk policy for a roughly $10 million build, the question of a water management plan comes up, and leaks tend to happen when plumbing lines are first charged.

If you want to see where your properties stand, the first step is a conversation. You can book a call here.