Canadian Underwriter

How much damage a toilet malfunction can cause

February 11, 2020   by Greg Meckbach

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Your property client’s flood risk could arise from a weak link in the bathroom.

Water damage claims of over $100,000 can result if the supply line feeding water to the toilet breaks, says metallurgist Paul Okrutney, founder of Toronto-based insurtech Mitigateway.

“They are extremely common,” Okrutney said in an interview. “Basically your plumbing system is coming loose as if you just opened up a faucet and decided to spray on the floor.”

Okrutney spoke Feb. 5 during Communication Tools for Preparedness and Recovery, a panel held at CatIQ Connect, produced by Catastrophe Indices and Quantification Inc.

During his CatIQ Connect presentation, Okrutney showed a photo of the area under a toilet tank. Some toilet supply lines have a nut made of a type of plastic that degrades with contact with chlorine.

Cleaning chemicals could cause the supply line to degrade from the outside, or the municipal water supply – which is normally chlorinated – from the inside.

This often goes unnoticed by clients until it’s too late and water is coming out of the hose that is supposed to be feeding water into the toilet tank.

Okrutney – a professional engineer who founded Mitigateway in 2019 – told Canadian Underwriter he knows of one insurer that gets one such claim a week.

In a previous job, working for a forensic engineering firm, Okrutney dealt with toilet hose-related claims on a regular basis. The average loss he observed was about $100,000.

He described one loss – of about $500,000 – suffered by one couple whose toilet supply line failed shortly after they left for vacation.

“It must have happened very shortly after they left,” Okrutney told Canadian Underwriter. “Their entire house basically had to be gutted from top to bottom.”

The severity of a claim depends on how soon the client noticed the problem and where in the building the toilet is situated. If the toilet is in the basement and the client discovers the problem right away, the damage can be minimal. But if the toilet is upstairs and the failure happens shortly after the client leaves for work for the day, that’s when claims severity can hit six figures.

Many insurers probably do not know how much this kind of claim is costing them per year.

“When they record a claim – and I have seen this from talking to some underwriters – the field adjusters record a plumbing loss or a toilet failure or something like that” Okrutney said in an interview. “They don’t actually realize how many of these they are having in the grand scheme of things, because they are not granular enough in recording the problem.”

Mitigateway is looking to partner with home insurers who could have clients inspect their own homes and provide that information through an app, Okrutney said at CatIQ Connect. Insurers could then use that information to segment risk and give clients advice on how to reduce property risk.

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