Plumbing Supply System Failure Risks

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Plumbing Supply System Failure Facts:

A review of homeowner’s insurance claims resulting from plumbing supply system failures from multiple insurance companies around the country revealed:

• Plumbing supply system failures are the leading source of residential water losses, with 48% greater losses (in terms of total payouts) than the second leading source.

• Plumbing supply system failures cost an average of $5,092 per incident after the deductible was paid.

• Of the claims analyzed, 65% were caused by a failure of the plumbing supply system material, while 18% were caused by frozen pipes.

• Frozen pipe-related failures resulted in losses that were roughly twice as severe as those caused by plumbing supply system material failures.

• The risk of a frozen pipe failure is dependent upon the geographic location of the home, the location of the pipe within the structure, and the time of year.

• Homes located in North Region states with plumbing in the basement and/or exterior walls have the greatest risk of a frozen pipe failure.

• Plumbing supply lines to the exterior hose bib are the areas most vulnerable to bursting during freezing weather. In this sample, January was the month when pipes were most prone to freezing.

• In this sample, homes that were 16 to 40 years of age represented a larger proportion of supply system material failure claims than their proportion of total policies.

• The proportion of total water loss claims attributed to supply system material failure was twice as high in the South Region than in the North Region.

• Of the claims analyzed, 22% of all supply system material failures occurred beneath the slab of homes without basements.

Plumbing Supply System Failure Mode Claim Frequency and Severity:

There are two common types of plumbing supply system failures.

The first involves frozen pipes, which can burst due to a buildup in water pressure caused by freezing water in an adjacent section of pipe. These accounted for 18% of all plumbing supply system claims in the study.

The second and most common type of failure occurs when the supply system material fails and results in a leaking or bursting pipe. This type of failure represents two of every three plumbing supply system claims in this study. (See Figure 1)

The cost of these two types of failures varies significantly. The average cost of a water loss due to a material failure is $4,296, compared to $8,189 for failures caused by freezing and bursting pipes. (See Figure 2)

Given the significant difference in the frequency and severity of these two types of plumbing supply system failure modes, they have been analyzed separately to determine the contributing factors.

Frozen Pipe Failures

Regional Variances

In order for a frozen pipe failure to occur, the right weather conditions must be present. These weather conditions are much more common in the northern United States.

Homes that experienced a water loss related to a frozen pipe were separated into two regions: North Region states and South Region states. (See Figure 3)

Not surprisingly, the majority of frozen pipe claims were from North Region states. In our sample data, 60% of the total population of water loss claims was from the North Region and 93% of the frozen pipe claims were attributed to North Region states. Frozen pipe claims accounted for 4.6% of the total population of water loss claims in the North Region compared to only 0.5% of claims in the South Region.

 

Claim Risk and the Time of Year

This study included frozen supply system claims from 1998 to 2005. Although 87% of all frozen pipe claims reviewed occurred between 2002 and 2004, this result was a function of the claims requested for review and is not an indicator that there was a higher frequency of frozen pipe claims during this timeframe.

The frequency analysis of frozen pipe failure claims shows 39% occurred in the month of January. (See Figure 4) This figure was greater than the frequency of claims in any other month.

Given that 76% of the all water loss claims reviewed for this study were pulled from only a 3 year period, it is not possible to determine if this sample distribution of frozen pipe claims across the 12 calendar months reflects the actual distribution or if these results are an anomaly. Since January tends to be the coldest month this finding appears consistent with weather conditions. If this is a true indicator of when water losses due to frozen pipe failures will occur, this provides guidance for IBHS and insurance companies in timing their frozen pipe awareness mitigation campaigns.

For each of the major cities where data was collected, the proportion of total water loss claims atributed to frozen pipes was plotted against that city’s average low temperature in January (as reported on the web site weather.com). (See Figure 5)

As expected, the number of frozen pipe claims as a proportion of total water loss claims decreases as the average low temperature in Janunuary increases. In sum, frozen pipes accounted for 5.8% of all water loss claims in cities with average temperatures below 20 degrees in January, compared to 1.4% of claims for those cities with average low temperatures above 20 degrees in January.

Pipe Location

Where the pipe is located in the structure will affect its vulnerability to frozen pipe failure. Pipes located in the basement and in exterior walls are far more susceptible to failure than pipes located in upper floors or in interior walls.

In this study, 37% of all frozen pipe failures occurred in the basement. Additionally, 15% of all failures occurred on the first floor in an exterior wall. (See Figure 6)

It should be noted that half of the losses categorized as being on the “First Floor, Other” also occurred in the wall. However, the claim information did not state whether it was an interior or exterior wall. For those claims that were located in an exterior wall, 7 of every 10 claims were due to the failure of the water line that supplied an exterior water spigot or sillcock.

 

Plumbing Material Type

An attempt was made to collect the plumbing material type for every frozen supply system claim that was reviewed. This was to be determined from the claim adjuster’s notes or from damage photos. Unfortunately, for the majority of the cases, the plumbing material type could not be determined.

For those cases where the material was known, nearly all of the water loss claims stemming from frozen pipes involved copper plumbing systems. (See Figure 7)

On the surface, it may appear this is an indicator that copper plumbing systems are more prone to freezing and bursting. However, there are far too many uncertainties to make a definitive determination.

For example, the number of homes with various plumbing material types is unknown. It is believed that there are likely many more homes in this study with copper plumbing than other material types. If that is the case, you would expect to see more failures involving this system.

Studies should be conducted on the performance of various supply system material types in freezing weather conditions to support findings from this study.

As noted above, frozen pipe claims are especialy costly. Consequently, homeowners in regions that experience freezing temperatures should take steps to minimize risk (a section on reducing supply system risk, including frozen pipes, begins on page 7).

Supply System Material Failures

Supply system material failures most often occur when the material begins to rust and corrode or develops a pinhole leak. Poor installation may also be a factor. Installation related failures are most common around the connections and joints. If this cause is present, it typically results in a failure within the first few years after installation.

Age of Supply System and Material Types

In order to explore the potential dependence of material failures on the age of the plumbing system, plumbing systems failures as well as the total number of policies were grouped into 5 year age bins. It is assumed for this analysis that the age of the home is the same as the age of the plumbing supply system. If age were not a factor, the percentage of claims for a particular age of home would match the percentage of policies for that age of home.

Homes in the 0-5 through 11-15 year age bins represent a smaller proportion of claims than policies. This indicates a lower claim frequency for newer homes. By the 21-25 year age bin, the proportion of claims is nearly 70% higher than the proportion of policies. For homes 36 years old or older, the proportion of claims in each age bin is relatively consistent with the proportion of policies in its respective age group. The relatively more frequent material related failure rates for the 16-20 through the 31-35 year age bins could be related to material changes, such as the use of thinner copper pipes or increased use of plastic piping. The fact that this increased risk dissipates for older homes may be due to the replacement of plumbing in older homes.

The material type in a plumbing system failure could only be determined from the claim files for approximately one third of reviewed claims. (See Figure 9)

The four main types were:

• Copper

• Galvanized Steel

• Polybutylene

• PVC

On average the percentage of polybutylene claims was just 3% of the total distribution (or 6% if only the four main material types are considered). For homes 11 to 25 years old the percentage increases dramatically, peaking at 32% of all claims incurred for homes between 16 and 20 years old when just the four main material types are considered. (See Figure 10)

This is an apparent trend that should be analyzed further. However, given the data available in this study, it is impossible to say with certainty whether the increased proportion of material failures identified as polybutylene piping is due to any inherent weakness in this product or if this simply reflects increased use of this material in homes built between 1986 and 1989.

However, problems with polybutylene supply systems installed between January 1, 1978 and July 31, 1995 are well documented in a class-action civil lawsuit, Cox vs. Shell Oil. This led to the banning of this material under several building codes.

 

Plumbing System Location

While the most common location of frozen pipe failures is the basement, the first floor (including the foundation) is the most common location of supply system material failures. (See Figure 11) In the South Region where basements are less common, 46% of the material failures with a known location occurred in the foundation of the home. Another 36% were located elsewhere on the first floor of the home. In the North Region states, basements were the most common location of supply line material failures, comprising 38%.

The frequency with which plumbing systems are installed below the foundation in South Region states compared to North Region states may explain why supply line material failures make up 15% of all water loss claims in South Region states compared to only 7% of all water loss claims in the North.

Metal-based plumbing supply systems, such as copper, that are installed beneath the slab are at risk of early corrosion and pinhole leaks if left unprotected.

Pipes installed in this manner are required to be encased in a plastic sleeve to prevent direct contact with the concrete and to protect the pipe from corrosive soils, moisture intrusion, and undesirable reactions between dissimilar metals. The risk of corrosion increases if the pipe is improperly sleeved and water or soil is allowed to seep inside. Additionally, if the water running through the pipes is highly acidic, it may also corrode the pipe from the inside out.

Factors Contributing to Slab Leak Risks

Because they are not plainly visable it is difficult to evaluate the risk of failure of supply systems located below the slab of a home once the home has been constructed.

However, since many supply system slab leaks are related to the installation of the system, here are some things to consider:

• Was the home built during a period of high growth? Homes that were built on a fast-paced schedule tend to have less quality control.

• Was the home built in an area and during a time period where building codes were updated and the processes for adequate enforcement and inspection were in place? Homes built in areas that maintain and enforce codes will likely have the most thorough plumbing inspections.

Regional Differences in Severity

Furthermore, the average claim severity for supply line failures is higher in South Region states then in North Region states. (See Figure 12)

This difference is statistically significant (at a .05 level), and is not explained by factors such as loss story, structural location or occupied/unoccupied status.

Reducing Supply System Failure Risk

One of the most important things to do once an increased risk of a plumbing supply system failure is recognized is to simply become more aware of potential leak situations.

This includes:

• Closely monitoring water bills for signs of excessive usage.

• Paying attention to pipes that “bang”, called water hammer, when faucets are turned off.

• Staying alert to rust stains in sinks or rust-tinted water.

• Regularly testing the pH levels of water in private well systems.

• Being aware of any signs of moisture in the walls or in floor systems.

• Checking for wet soil erosion near the foundation.

• Ensuring that everyone in the house knows how to and where to shut off the water supply valve.

• Testing the valve system twice a year to make sure it is operating and has not become stuck in the “open” position.

Additionally, homeowners living in cold weather regions that are susceptible to freezing conditions should:

• Set the thermostat to 60 degrees or higher, even when the home is unoccupied.

On extremely cold days:

• Set faucets to drip to release pressure inside the pipe.

• Open cabinet doors under sinks (especially those against exterior walls) to allow warm air to circulate around the pipes.

• Apply space heating, infrared lamps, or some other source of warming to areas in basements where pipes could freeze.

• Insulate exposed plumbing (especially in basement ceilings) with at least two-inch fiberglass insulation below the pipes.

• Remove garden hoses from the exterior hose bibs, drain the water line and install a frost-free sillcock.

• When leaving the home unoccupied for an extended period of time, ask a friend or relative to check on the home during subfreezing temperatures to ensure that the home maintains the correct temperature.

As an additional measure, consider purchasing a whole house leak detection system. A desirable system should include the following features:

• Hard wiring into the electrical system with a battery back up.

• Audio and visual notification when the batteries need replacing.

• Automated monitoring and system shut down when sudden water pressure changes occur.

• Third party notification when a leak has been detected.

Important notes about this claim study:

1. This study includes the analysis of 1,928 plumbing supply 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 supply system claims, only 11,377 closed claims and 1,912 supply 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. Where analyses were conducted on the comparison of policy distribution and claim distribution, the claim distribution for one of the five companies was removed from the claim sample as this company chose not to provide a corresponding policy distribution.

4. 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” and typically represent 1% – 3% of the total claim population under consideration.

This is a summary version of the IBHS report. IBHS members that have already registered can view the full report here. If you have not yet registered please use the simple instructions below. For membership information, please call (813) 286-3400.

For questions about this report and reprint opportunities, please contact Candace Iskowitz at ciskowitz@ibhs.org or call (813) 675-1047.

For IBHS membership information, please contact Joy Stokes at jstokes@ibhs.org or (813) 675-1050.