Have you considered self-insuring your leak adjustment insurance?

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Have you looked into offering an insurance program to ensure your customers against having to pay for the water lost when they have a leak?

There are a number of for-profit companies offering leak protection insurance, so it must be a lucrative business. We met with a prospect recently who is considering self-insuring their own leak adjustment program. The concept of self-insurance in government has been around for a while and is very popular with some local governments.

Calculating the premium amount

The prospect I mentioned above is going to total their water leak adjustments for the most recent year and divide that total by the number of active water customers. They anticipate the premium will be about $.25 per customer. They plan to offer coverage for one leak per year and they will forgive excess usage for two consecutive billing months. Should the customer not get the leak repaired in a timely fashion, and the excessive usage extends into a third month, that will not be covered by the leak insurance.

Allowing customers to opt-out

This utility plans to give customers the option of opting out, if they so desire. However, that means they will get no assistance in the form of a leak adjustment, should they have a leak.

Making the program even more lucrative

This utility also has primarily AMI meters, so if they practice proactive leak detection, they can further mitigate the cost of leak claims they must pay, providing their customers cooperate and address a leak as soon as they are notified of one.

Is a leak insurance program for you?

Are you trying to decide if you should implement leak insurance? Furthermore, are you trying to determine if self-insurance makes sense? If the answer to either question is “yes”, please give me a call at 919-232-2320 or e-mail me at gsanders@edmundsgovtech.com to learn how a business review could help inform your decision-making process.

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