ACE Private Risk Services Study Identifies One Type of Device That Could Reduce Homeowner Damage Due to Water by up to 93 Percent

PHILADELPHIA--()--Homeowners could eliminate up to $8.5 billion a year in property damage if they only deployed an automatic water leak detection and shut-off system to prevent or reduce damage from water.

Water caused $9.1 billion in annual homeowner policy property losses from 2007 to 2009 – approximately 23 percent of all homeowner property losses1. But up to 93 percent of the cost of water damage could have been prevented or minimized if an automatic water leak detection and shut-off system had been present in the homes, according to an ACE Private Risk Services study of damage sustained by affluent homeowners. ACE Private Risk Services is the high-net-worth personal lines business of the ACE Group.

“Imagine coming back home from a shopping trip, stepping through your front door onto the rug, and wondering why it sounds like a sponge – or worse, a wading pool,” said Gary Raphael, ACE Private Risk Services Senior Vice President of Claims and Risk Consulting. “That’s what even a minor water leak can do in a few hours. One of our clients recently had a leak that caused over $150,000 of damage in just 30 minutes.”

According to ACE Private Risk Services, an automatic water leak detection and shut-off system could prevent or greatly reduce water damage caused by leaking pipes, plumbing fixtures, hot water heaters, appliances and heating and cooling systems. In luxury homes, ACE estimates these types of losses account for 80 percent of the instances of water damage covered by a standard homeowners policy. Moreover, ACE estimates the average cost of repairs for this damage could exceed $20,000, compared to only $6,000 for damage related to roof leaks and other causes of loss that the system would not have prevented. Implementing the system can also help homeowners conserve water. USEPA figures2 show that leaks waste an average of 11,000 gallons of water per home each year, and homeowners who fix easily corrected leaks, such as leaking toilet flappers and dripping faucets, can save more than 10 percent on their water bills.


Affluent Homes’ Percent of Water Damage Dollar Losses By Cause3

Cause of Damage  

Preventable with
Auto Leak Detection
& Water Shut-off

  Not Preventable   Total
Plumbing Leaks   32%   0%   32%
Heating and Cooling Unit Leaks   30%   0%   30%
Bathroom Fixture Leaks   23%   0%   23%
Appliance Leaks   8%   0%   8%
Roof, Window, Other Exterior Leaks   0%   4%   4%
Other Water Damage   0%   3%   3%
Total   93%   7%   100%

While ACE Private Risk Services’ homeowners insurance policy covers such losses, the family must still endure the disruption of repair work and the potential loss of irreplaceable items and potential health hazards, as well as the emotional impact of such an accident. To help its clients prevent or minimize water-related damage, ACE Private Risk Services has forged an ongoing relationship with Sentinel Hydrosolutions, which markets a water leak detection and shut-off system called the Leak Defense System. The relationship includes specially discounted pricing for the equipment, as well as up to a seven percent credit on the base homeowner premium.

“Investing in water loss prevention is wise in the protection of people’s homes,” said Mr. Raphael. “In the end, everyone wins when you can prevent or minimize losses.”

About ACE Private Risk Services

ACE Private Risk Services is the ACE Group’s high-net-worth personal lines business, which provides specialty coverage for homeowners, automobile, recreational marine, umbrella liability and collections insurance for affluent individuals and families. Additional information can be found at: Celebrating 25 years of insuring progress, the ACE Group is a global leader in insurance and reinsurance serving a diverse group of clients. Headed by ACE Limited (NYSE:ACE), a component of the S&P 500 stock index, the ACE Group conducts its business on a worldwide basis with operating subsidiaries in more than 50 countries. Additional information can be found at:

1 Based on a SNL data for total Homeowner property losses and ISO data for the percent of Homeowner losses attributable to water.


3 Percentages based on ACE Private Risk Services’ analysis of claims for water damage to homes with an average replacement cost value of $1.1 million. Losses due to flood and sewer and drain back-up were not included since these types of loss are not covered by the typical standard industry policy, although sewer and drain backup is covered by the ACE Platinum Portfolio Homeowners policy.


ACE Group
Carla L. Ferrara, 215-640-4744


ACE Group
Carla L. Ferrara, 215-640-4744