Plumbing Drain System Failure Risks

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Plumbing Drain System Failure Facts:

A review of homeowner’s insurance claims resulting from failed plumbing drain systems that occurred throughout the United States revealed that:

• Drain system failures are one of the top five sources of residential water losses.

• The average cost of a drain system failure was approximately $4,400 per incident after the deductible was paid.

• The average drain system failure was 61% more costly in South Region states ($6,143 vs. $3,812) than in North Region states.

• Drain system claims related to material performance issues increase steadily until the home reaches 40 years of age beyond which no clear trend emerges.

• 68% of all drain system sewer backup claims occurred for backups in basements and nearly all of these were located in North Region states.

• Sewer backup claims occurring for backups in basements were 23% more severe when the basement was finished compared to when the basement was partially finished and 65% more severe than in unfinished basements.

• The Clean Water Act introduced in the 1970’s by the Environmental Protection Agency included new laws that prohibited storm water drains from being connected to the sanitary sewer. The data in this study suggest homes in the North Region built after this prohibition experienced 30% fewer basement drain system sewer back-ups while homes built in the south region experienced a 68% reduction.

Plumbing Drain System Failure Mode Claim Frequency and Severity:

Most drain system failures occur when the sewer drain backs up and overflows into the home or as a result of material performance issues (such as when the drain system piping corrodes and leaks or a connection loosens). In this study, 52% of drain system failures were caused by sewer backups, while 37% were related to material performance issues. (See Figure 1)

The difference in the average claim severity between these two failure modes is insignificant. (See Figure 2) Likewise, the interquartile ranges for both failure modes are similar. (See Table 1)

 

Both failure modes resulted in essentially the same level of damage. The difference between failure modes remained insignificant after controlling for loss story. However, there are significant variances in severity by region as discussed below.

 

Regional Variances

Homes that incurred plumbing drain system failures were separated into two regions: North Region states and South Region states. (See Figure 3)

The proportion of total water loss claims attributed to drain system failures was nearly twice as high in North Region states than in South Region states. (See Figure 4)

This difference can be attributed to sewer backups. North Region states accounted for 60% of the total water loss claims reviewed in the study yet they comprise 84% of total sewer backup claims (possible reasons are discussed below). This disproportionate rate of claims was not observed for failures related to material performance issues. The proportion of material performance related failures in both the North and South Region were in line with their relative proportions of total water loss claims. (See table 2)

Though the evidence suggests drain system failures are more frequent in the North Region, in this study the South Region suffered greater severity of claims. (See Figure 5)

These differences are statistically significant (at a .05 level) and could not be explained by other observed factors such as loss story or loss location.

Drain System Material Performance Issues and Age of Home

In order to compare the relative risks of material performance issues between homes of various age groups, frequency distributions were constructed using 5 year age bins. One frequency distribution reflected the actual sample of material performance related claims observed in this study. A second distribution was normalized based on a weighted average of the statewide policy distributions of the companies that supplied data. This normalized distribution emphasizes the effects that the age of the home had on the likelihood of material performance related failures. For each age bin the actual proportion of claims was divided by the normalized proportion of claims for that age bin. Results greater than one imply a greater frequency of claims for a given age group compared to the sample population as a whole, while results less than 1 imply reduced frequency.

The analysis showed the frequency of drain system material failure increasing sharply, especially between the 16-20 and 36-40 year age bins, and then leveling off somewhat thereafter. (See Figure 6)

 

Drain System Sewer Backups and Loss Story Location

Sewer system backups comprised 6.9% of all water loss claims in the North Region but only 1.9% of total water loss claims in the South Region. A primary difference is that homes in the South Region are commonly built over a crawlspace or on a slab foundation, while most of the homes in the North Region states with sewer backups claims had basements. It is possible that a number of sewer backups in the South did not result in a claim because they were handled by the howmowner unless it was a particularly expensive claim. Also, drain systems in basements are at times below the sanitary main. These types of connections are at increased risk of sewer backup.

These possible explanations are supported by the results from this study which showed that 82% of the drain system sewer backups that occurred in the North Region were located in the basement. (See Figure 7) In contrast, most sewer backups in homes in the South Region were either on the first floor or were outdoors. (Another factor impacting sewer backup frequency is the year of construction relative to the Clean Water Act of 1970. This is discussed in further detail in the following section.)

As cited above claim severity tended to be significantly higher in South Region states than in North Region States. The analysis of loss severity by loss story was conducted independently for the North and South regions to control for this regional difference in claim severity. (See Figure 8)

Though differences in average loss severity by loss story were more pronounced in South Region states, small sample sizes precluded determining statistically significant differences. In the North Region, both basement claims and claims resulting from outdoor failures were significantly higher than first floor failures (at a .05 level).

For claims in North Region states that resulted from basement level sewer backups, the condition of the basement also affected severity. (See Figure 9) Damage was 23% more severe for homes with finished basements compared to partially finished basements, and 65% more severe than in homes with unfinished basements.

 

Drain System Sewer Backups and the 1970 Clean Water Act

Many sewer backups occur when rain water finds its way into the sanitary drains. Prior to 1970, many storm water systems were connected to the sanitary system. During periods of heavy rain, sewage treatment plants would become overloaded causing water to backup into homes. In the 1970’s, the EPA’s Clean Water Act required all new storm water systems to direct water into the ground or a drainage ditch rather than being connected to sanitary systems.

To compare sewer backup frequency of pre and post Clean Water Act construction, claims distributions were developed in a manner similar to that described in the drain system material performance section above. For this analysis pre/post Clean Water Act claims distributions were constructed individually for the North and South regions. In the North Region post 1970 construction made up 26% of claims compared to an expected 34% (if age of construction had no impact on sewer backup claim frequency). Alternatively, pre 1970 construction accounts for 74% of sewer backup claims in the North Region compared to the expected 66% if year of construction did not affect claim frequency. This suggests a 24% reduction in claim frequency for post Clean Water Act construction in the North Region. For South region states, claims data suggest an even greater reduction in sewer backup for homes constructed after the Clean Water Act relative to prior construction. (See Figure 10) These results suggest a 41% reduction in sewer backup claims for post 1970 construction in the South Region compared older homes.

The reduced frequency of sewer backups in homes built after the Clean Water Act (especially in South Region states) would help to explain why sewer backups make up 7.2% of all of this study’s water loss claims in the North Region compared to only 1.8% of all water loss claims in the South Region. Homes built after the Clean Water Act constituted 75% of the policies written in South Region states by data contributing companies in this study compared to only 43% in the North.

Reducing Drain System Failure Risk

Evaluating the risk of a drain system failure is complicated by the fact that most drain system components are hidden behind walls or beneath floors. However, there are still things homeowners can do:

• If a home was constructed before 1970, there is an increased risk of a sewer drain backup. Contact the local utility company to determine whether the local storm water system is tied into the home’s sewer system.

• Homes located on the downside of a hilly street or lower than street level are at greater risk for a sewer backup.

• If either of the two conditions cited above apply to your home, hire a plumbing professional to install a backflow prevention assembly in the drain system. Some municipalities offer partial or full reimbursements for installing these devices on at-risk homes.

• Plant trees far away from lateral drain lines to prevent the piping from being attacked by aggressive tree root growth.

• Store personal belongings on raised shelving as far from basement floor drains as possible.

• Do not pour grease down the drain. It will solidify in the drain pipe and can cause a sewer backup. Instead, let the grease cool and dispose of it in the garbage.

Important notes about this claim study:

1. This study includes the analysis of 1,146 plumbing drain system claims from a sample of 12,404 closed water claims. These claims occurred in 20 different states from five insurance companies

2. Where analyses were conducted on the severity of drain system claims, only 11,377 closed claims and 1,107 drain system claims were considered. The remaining claims were removed from the sample as the claims had obvious upper and lower claim payment limits placed when the claim sample was pulled.

3. All claim severity analyses excluded any claim payment values that were more than three standard deviations greater than the average claim payment. These claims were termed “outliers”.

 

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