Prestige Underwriting warns £20k Escape of Water caps may leave customers exposed as 41% of claims exceed limit
Prestige Underwriting has warned that fixed monetary caps on Escape of Water cover could leave unoccupied and holiday home customers significantly exposed, after new claims data showed that fixed caps create protection gaps.
Analysis of claims on unoccupied and holiday home policies so far this year found that 41.4% of claims exceeded £20,000. More than one in five claims, 22.4%, exceeded £50,000.
Prestige Underwriting said the figures highlight the potential protection gap created by policies that apply a fixed Escape of Water cap, particularly at a time when the cost and severity of water damage claims continue to rise across the home insurance market.
The warning comes amid growing concern about the impact of Escape of Water claims, especially for unoccupied and intermittently occupied properties where leaks may go undetected for longer, allowing damage to spread and reinstatement costs to escalate.
Tim Baxter, Business Development and Relationship Director at Prestige Underwriting, said:
“Escape of Water losses can be severe, costly and highly disruptive. A fixed Escape of Water cap may look simple on paper, but our claims data shows it can create a very real protection gap.
“Our view is that brokers and customers deserve a better conversation and access to effective choice. By asking customers to take sensible preventative steps, we can help them retain access to more meaningful protection, while also reducing the likelihood and severity of a loss.”
“For many customers, that means understanding the importance of simple preventative measures such as turning off the main water supply and fully draining the domestic cold-water system when a property is left unoccupied.”
Escape of Water is one of the most disruptive property claims. A significant leak can damage floors, ceilings, electrics, fixtures, fittings and contents, with properties sometimes becoming uninhabitable for extended periods. For homes that are unoccupied or only visited periodically, the consequences can be particularly severe because the leak may not be discovered quickly.
Prestige Underwriting said the issue should be viewed as a customer outcome matter, not simply a policy wording change.
Prestige Underwriting is encouraging brokers to speak to affected customers about the true cost of Escape of Water damage, the potential limitations of capped cover, and the importance of preventative measures such as turning off the main water supply and fully draining the domestic cold-water system when properties are left unoccupied.
This includes draining cold-water tanks, pipes, toilets, cold taps and outside taps. Customers do not need to drain the hot water system or the central heating system, including radiators.
The business said this is particularly important for customers with unoccupied homes, holiday homes, higher-value properties, older plumbing systems, or properties left unattended for extended periods.