Insurers mandate leak tech as water claims soar
The gist
U.S. home insurers are making leak-prevention tech mandatory as record-setting water damage claims threaten the bottom line.
What to know
- Water-damage claim severity in 2025 jumped 25.9% year-over-year and a staggering 93.2% since 2019, even as claim frequency dropped by nearly a quarter.
- Some insurers now require automatic water shutoff devices for high-risk homes, moving leak tech from optional perk to underwriting must-have.
- Around 40% of monitored devices go offline for long stretches, forcing insurers to track whether leak prevention tech stays connected after policies are issued.
Inflation Drives Soaring Losses
Water-damage claim costs are exploding due to inflation and higher repair expenses, even as fewer incidents are reported.
In 2025, overall U.S. home insurance claims showed a worsening loss picture even as frequency eased, sharpening attention on preventable sources of damage. LexisNexis Risk Solutions reported that “overall claims severity reached its highest recorded level in 2025,” rising “by 25.9% compared with the previous year” and “by 93.2% since 2019,” while “claims frequency declined by 23.8%,” a pattern Reinsurance News said left insurers facing “increasing pressure and uncertainty” as loss patterns were reshaped and risk assessment had to become more precise.
Water losses were a clear part of that pressure: in 2025, water-damage risk worsened because claim severity kept rising despite lower frequency. LexisNexis found that “water damage losses decreased by 6.4% between 2024 and 2025,” with “claims frequency falling by 7.8%,” but “claims severity increased by 2.5%,” while MBA Newslink separately noted, “Non-Weather-Related Water loss cost decreased 6.4% and frequency decreased 7.8% from 2024 to 2025, while severity rose 2.5%”; the report added that “Severity for the peril increased 63.16% between 2019 and 2025, likely due to inflation and rising material and labor costs associated with remediating water damage.”
Tech Mandates Reshape Policies
Insurers now require leak-prevention devices to remain online, making real-time connectivity a condition for ongoing coverage in high-risk homes.
Insurers are already turning leak-prevention technology into a product and underwriting feature, not a discretionary add-on. In higher-risk homes, automatic water shutoff systems and other connected devices have become requirements for coverage in some cases, while in others they help homeowners qualify for credits or secure coverage that might otherwise be difficult to obtain, showing these tools are now being written directly into eligibility and pricing decisions rather than marketed only as smart-home conveniences.
That embedding is extending beyond installation into ongoing policy management, because underwriting assumptions now depend on devices staying online and functional after binding. In a sample of 2,300 monitored automatic water shutoff devices, roughly 40% were offline for an extended period, which helps explain why carriers are being pushed to monitor continued connectivity as part of the protection they are effectively underwriting into the policy. The same shift is appearing in insurer-linked prevention programs and exposure assessment models, including Quensus working with Aviva on proactive water-risk mitigation through LeakNet, and connected-building data can give insurers evidence that controls are installed and maintained; LexisNexis data showed non-weather water-claim severity rose 63 percent between 2019 and 2025 even as claim counts fell.
