A Spurt In Calif. Water Claims Cost

NU Online News Service, June 5, 4:20 p.m. EST?ACalifornia insurance trade association said an examination of waterdamage claims data reveals "dramatic" increases that have costinsurers billions and squeezed the market for homeownerscoverage.

Losses "have increased dramatically in each of the past fiveyears," said the Insurance Information Network of California, basedin Los Angeles.

A spokesman for the group, Pete Moraga, said the study looked at1997 through 2001. The growth of water-associated mold claimsdidn't have an impact until 2000. He said the organization isworking to come up with a study that sifts out the specific cost ofmold claims.

Candysse Miller, IINC executive director, said the cost of waterclaims "is helping to fuel a homeowners insurance crunch asinsurers struggle to keep these skyrocketing costs undercontrol."

Water, she said, "represents a disproportionate share of theclaims payments made on homeowners insurance policies."

According to the IINC, while water-related claims from leakingappliances, lavatories, burst hoses and pipes have variedyear-to-year, the costs have risen steeply, climbing $47 millionbetween 2000 and 2001, and $97 million between 1999 and 2000.

The group said that the average water claim cost among insurersthat were surveyed was $4,730 last year, which was nearly doublewhat the average claim cost in 1997.

Using data from insurers representing 63 percent of the state'shomeowners insurance market, IINC said it found trends indicatingthat overall industry water losses between 1997 and 2001 could beas high as $2.5 billion.