Winter is the season of bursting pipes. Most claims professionals are probably familiar with the building damage that can occur in the event of water exposure, but some may not be aware of the options they have when it comes to resolving a loss with water-damaged electrical and mechanical equipment. This article gives tips and guidelines on how to safeguard against excessive costs arising from unnecessarily replacing water exposed equipment.
Water exposure reality
Nearly all buildings have some type of water pipes running through them, including heating, cooling, domestic water and sprinkler systems. When pipes burst, the flow of water can cause damage to building materials, as well as the contents of the building. But what about the electrical and mechanical equipment that is included in the claim?
Many policyholders will immediately claim that equipment must be replaced if it has been exposed to water. Some contractors will even make this claim as well, and will refuse to consider the possibility of repair or restoration.
Without having prior technical experience, this leaves the claims professional believing that replacement of the water-damaged items is inevitable. This could be a costly mistake. Here are some tips from an expert on how to minimize unwarranted replacement of equipment due to water exposure.
Find an expert
This goes without saying, but find a second opinion when electrical and mechanical equipment is deemed unrepairable. While a policyholder may claim that these items were totaled, an expert is needed to help assess whether the equipment must be replaced or can in fact be repaired or restored to its pre-loss condition. If replacement is warranted, an expert can determine fair and reasonable costs for like-kind-and-quality replacements.
Water claims in commercial buildings, as well as larger homes, can involve many types of equipment, some of which can be quite expensive. Other equipment that's damaged by water, such as heating and cooling systems, and electrical distribution equipment, can also have significant life safety concerns.
Refrain from making an assumption about whether equipment must be replaced based on the policyholder's statements. Find an unbiased expert with equipment-related experience to make the final determination.
Replacement vs. Restoring
HVAC systems
While inspecting heating and cooling systems, an expert will look for signs that water exposure has caused damage to critical equipment components. Is there corrosion on the gas controls? Did the insulation get wet? If the exposure is limited to a small number of components or an isolated area, there is a good chance that the equipment can be repaired rather than being fully replaced.
Electrical distribution
In electrical equipment, an expert will look for evidence of deterioration that may have resulted from corrosion on conductors and contacts. If the electrical conductors are intact and merely show signs of water residue, they can typically be cleaned and restored to a pre-loss condition. In some cases a single component of a larger set of switchgear may require replacement, but the rest of the equipment can be restored. Even medium- and high-voltage equipment can often be repaired or restored after being exposed to water.
Sensitive electronic equipment
Often, policyholders will hesitate to power on critical electronic items for fear that they will be damaged if they have been exposed to water. An expert can assess whether water did in fact penetrate the interior of the equipment and recommend whether it should be cleaned before being tested. An expert can also determine whether the damage is limited to easily replaceable components such as power supplies or externally connected devices.
Josh Held, BSME, CFEI, is a technical loss consultant with Amset Technical Consulting Inc., a provider of mechanical and electrical engineering consulting and O&C investigative services. He may be contacted at jheld@amsetusa.com.
Want more information on seasonal water damage claims? Contact him at info@amsetusa.com or visit www.amsetusa.com.
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