Pipes froze but claims anticipated

COLD CALLS: David White, partner at Butler & Messier in Pawtucket, says claims by the company’s commercial clients have been “surprisingly” low given the weather this winter. He says that could be a function of better management or simply “luck.” / PBN PHOTO/ MICHAEL SALERNO
COLD CALLS: David White, partner at Butler & Messier in Pawtucket, says claims by the company’s commercial clients have been “surprisingly” low given the weather this winter. He says that could be a function of better management or simply “luck.” / PBN PHOTO/ MICHAEL SALERNO

Rhode Island’s relentless, bone-chilling winter left its mark with freezing pipes and other troubles for property owners across the state, say insurers. For many, the combination of an extremely cold winter and still-sluggish economy was particularly challenging.
“In a state that has one of the worst economies in the 50 states, we do [still] see a lot of properties that are vacant, or partially vacant, and under the typical commercial insurance policy in Rhode Island there is a mandatory state form, the Rhode Island Changes form, that says if the owner has a property that’s been vacant for more than 60 days before the loss, they do not have coverage should the pipes burst,” said David White, partner in Butler & Messier Insurance, who oversees commercial lines.
“This is one area where we see the unfortunate happen,” said White. “If the property has been vacant for more than 60 days, the damage is not covered unless the property owner has taken steps to prevent it, whether it’s keeping heat in the building or draining the water from the pipes.”
“But the cold this past winter should be a warning to business owners that if they’re in a situation where they have a vacant building, they need to discuss with their insurance agent the restrictions in coverage that result when you have a vacant building,” he said.
Overall, however, Pawtucket-based Butler & Messier, an independent insurance agency, did not see an unusual number of commercial claims during the winter, said White.
“Surprisingly, it’s been very quiet this year on the commercial side for claims,” said White. “We haven’t had the normal number of slip-and-falls or the car accidents due to icy conditions, which are the typical commercial claims. “We do have the broad spectrum with 2,000 commercial clients,” said White. “We have businesses including landscapers, electricians, nonprofits, manufacturers and medical facilities. Maybe it’s just luck or maybe people are getting better at managing their exposure.”
Burst pipes were, however, an all-too-common-occurrence this past winter for many homeowners.
“We’re a very large home and auto writer and on the personal-lines side, it’s been one of the worst years we’ve seen for burst pipes in a long time,” said White.
At Providence Mutual Fire Insurance, Commercial Lines Manager Robert Francazio said the extreme cold definitely had an effect on local businesses.
“It’s been very impactful. There have been a lot of pipe freezes causing a tremendous amount of water damage,” said Francazio, who echoes the vacant property issue.
“Our concern has been about units that are vacant because there’s no revenue coming in from those and the need for increased heat, so we tried to be vigilant about those properties,” he said.
“Typically, when we do renewals, we have a loss-control engineer who checks vacancies to determine if they have a temperature-sensing alarm and what level of heat they’re maintaining,” said Francazio. “Often the smaller businesses are more vulnerable because if they’re deprived of a revenue stream, it’s more burdensome to protect the property in the extreme cold.”
While snowstorms were not as severe as in other years, extended cold caused claims due to ice damming, where the water backs up underneath the shingles and causes interior damage.”
The winter’s claims have not been substantial enough to trigger reinsurance, said Francazio.
An important responsibility of the insurance company is to be proactive in helping customers prevent damage, said Brian Spero, operating officer for the Beacon Mutual Insurance Co. in Warwick. “We only write in Rhode Island and we only write workers’ compensation,” said Spero. “Our primary mission is the safety of our 12,000 policyholders.
“Whenever there’s severe weather, in the course of employment there’s an increased incidence of employees getting hurt,” he said. “It could be slipping on the ice or while driving to work.”
One element in the broad program to minimizing incidents is Beacon Mutual’s winter-planning guide.
“We have a large loss-prevention staff that works with employers at their workplace to make sure it’s safe,” said Spero.
Beacon Mutual’s prevention specialists are very specific, he said.
“If it’s a construction site, we look at things like what kind of shoe the employees are wearing,” said Spero, who characterized the past winter’s weather as consistent with prior years that have also been extremely cold, but not particularly unusual for Rhode Island.
MetLife Auto & Home, the Warwick-based insurer with auto and homeowners’ insurance operations across the country, is well-diversified geographically.
“Severe weather in one part of the country does not necessarily affect our results, since weather is generally less severe in other parts of the country at the same time,” said MetLife Auto & Home President Kishore Ponnavolu.
“Although we have seen increased claims in New England and the Midwest this [past] winter, it is not the worst winter ever, nor even an historic-loss season for MetLife Auto & Home,” said Ponnavolu.“We plan financially for weather events and have focused this year on providing safety tips for our policyholders to help them avoid weather-related damages and claims.” •

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