A Spurt In Calif. Water Claims Cost
NU Online News Service, June 5, 4:20 p.m. EST?A California insurance trade association said an examination of water damage claims data reveals "dramatic" increases that have cost insurers billions and squeezed the market for homeowners coverage.
Losses "have increased dramatically in each of the past five years," said the Insurance Information Network of California, based in Los Angeles.
A spokesman for the group, Pete Moraga, said the study looked at 1997 through 2001. The growth of water-associated mold claims didn't have an impact until 2000. He said the organization is working to come up with a study that sifts out the specific cost of mold claims.
Candysse Miller, IINC executive director, said the cost of water claims "is helping to fuel a homeowners insurance crunch as insurers struggle to keep these skyrocketing costs under control."
Water, she said, "represents a disproportionate share of the claims payments made on homeowners insurance policies."
According to the IINC, while water-related claims from leaking appliances, lavatories, burst hoses and pipes have varied year-to-year, the costs have risen steeply, climbing $47 million between 2000 and 2001, and $97 million between 1999 and 2000.
The group said that the average water claim cost among insurers that were surveyed was $4,730 last year, which was nearly double what the average claim cost in 1997.
Using data from insurers representing 63 percent of the state's homeowners insurance market, IINC said it found trends indicating that overall industry water losses between 1997 and 2001 could be as high as $2.5 billion.
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