There are no insurance incentives for automatic water shutoff systems

Published: May 7, 2019

Updated: June 3, 2019

Author: Luke Jones



Major spring floods across New Brunswick, Quebec, and Ontario have raised the topic of overland flooding and its relevant flood insurance market again. For commercial owners or operators of residential buildings, is there an insurance incentive for installing automatic water shut off systems in such properties?

According to one industry expert, there are no standardized insurance incentives for a shutoff installation.

“To the best of our knowledge there are no scaled well publicized commercial subsidies being offered in the market right now,” said John Lancefield, CEO of Concord, Ont.-based Reed Controls Inc.

Speaking to Canadian Underwriter, Lancefield said there is no surefire way to get cheaper insurance rates by having a system to shut off water quickly. However, he said some individual insurers may offer discounts.

“There may be some one-off things happening” Lancefield said.

Reed is a manufacturer of devices that attach to plumbing valves and allow building managers to turn off water immediately via an internet connection. He says such a system saves time and money on waiting for a plumber.

“A plumber might take two hours to get to the site. That is the difference between $5,000 worth of paint touch-up and a quarter million dollars, three floors ruined because you didn’t stop the water earlier,” said Avi Moscovich, Reed’s vice president of marketing.

“We will have a property developer or owner or landlord and we will approach large Canadian carrier and say ‘this is a customer of yours. They are inclined to install our devices. Would you be interested in being part of that pilot or somehow supporting your policyholder?’ It’s early days. Clearly that’s piqued an interest,” Lancefield said.

“We see an opportunity to roll out a product that addresses the problem fundamentally of not being able to turn off water in commercial settings until a great deal of damage has been done.”