Act Now to Prevent Frozen Water Pipes

Freezing weather can bring the unexpected, from slippery sidewalks and ice dams to one of the most common problems—frozen water pipes. Knowing what conditions can cause pipes to freeze is the first step to prevention. If pipes do freeze, a quick response can keep them from bursting, avoiding the expense of replacement, possible water damage to walls, floors and electrical systems, or even a business shutdown.

According to the Insurance Institute for Business & Home Safety (IBHS), 37% of all frozen pipe failures occur in a structure’s basement. What’s more, pipe insulation to keep water pipes from freezing in the first place costs much less than the price of repairs.

IBHS recommends these prevention steps for businesses:
pipes-ibhs

Interstate notes that pipes are most likely to freeze in Connecticut, Maryland, New York, Ohio and Pennsylvania and that a 1/8 inch crack can cause the loss of 250 gallons of water per day and damages from $2,000 to $100,000.

According to Interstate:
frozen-pipes1

If pipes freeze, Interstate recommends:
Do:

  • Turn off the water flow using the main water valve
  • Inspect the pipe carefully for cracks or damage
  • Consult a plumber for advice, if you find cracks or signs of damage (also be sure to consult a professional if you aren’t sure which pipe is frozen and/or you are unable to inspect it)
  • Thaw the pipe gradually using a hair dryer or space heater
  • Confirm the pipe has thawed by turning the main water valve back on and making sure that water flows
  • Take steps to raise the temperature in the area where the pipe froze or insulate the pipe

Don’t:

  • Use a blow torch or open flame to thaw a frozen pipe – open heat sources can cause fires and other safety hazards
  • Stand in water while you are operating an electrical heater, dryer or any appliance—you could be electrocuted

Lloyd’s Finds Extreme Weather Can Be Accurately Modeled Independently

In a new report based on research from UK national weather service the Met Office, Lloyd’s has found that extreme weather events may be modeled independently. While extreme weather can be related to events within a region, these perils are not significant correlated with perils in other regions of the world.

The study’s key findings include:

  • Met Office research found that the majority of perils are not significantly correlated, but identified nine noteworthy peril-to-peril teleconnections, most of which are negatively correlated
  • Lloyds’ modeling finds that these correlations were not substantial enough to warrant changes to the amount of capital it holds to cover extreme weather claims
  • Even when there is some correlation between weather patterns, it does not necessarily follow that there will be large insurance losses. Extreme weather events may still occur simultaneously even if there is no link between them
  • An assumption of independence for capital-holding purposes is therefore appropriate for the key risks the Lloyd’s market currently insures
  • The methodology released in the report enables scenario modeling across global portfolios for appropriate region-perils

“This important finding supports the broader argument that the global reinsurance industry’s practice of pooling risks in multiple regions is capital efficient and that modeling appropriate region perils as independent is reasonable,” the report concluded.

According to Trevor Maynard, head of exposure management and reinsurance at Lloyd’s, “This challenges the increasingly held view among some regulators around the world that capital for local risks should be held in their own jurisdictions. Lloyd’s believes this approach reduces the capital efficiency of the (re)insurance market by ignoring the diversification benefits provided by writing different risks in different locations and, in so doing, needlessly increases costs, to the ultimate detriment of policyholders. Insisting on the fragmentation of capital is not in the best interests of policyholders.”

Check out the map below for further insight from the Met Office about large-scale weather perils that do demonstrate statistically significant correlation:

lloyd's extreme weather perils

California’s New Localized Water Controls a Step Forward

With higher levels of rain and snowfall over the winter, California’s water situation has eased in some areas, prompting the state to initiate new water conservation rules, adopted on May 18 and in effect June 1 through January 2017. The regulations give control over water usage to local communities, which means more restrictions in some areas than in others. In Northern California, winter precipitation has filled some reservoirs, while drought conditions persist in Southern California.

The previous rule—enacted in April 2015 by Gov. Jerry Brown, who issued an Executive Order mandating a 25% reduction of urban water usage from 2013 levels over a nine-month period—saw a savings of about 424 billion gallons. That followed a failed year-long effort to achieve a voluntary 20% reduction in water usage, with statewide conservation results averaging between just 7% and 12%.

The State Water Resources Control Board explained that the new approach replaces the percentage reduction-based water conservation standard with a localized approach. The emergency regulation requires that urban water suppliers ensure that at least a three year supply of water would be available to their customers in case of drought conditions. Suppliers that would face shortages under three additional dry years are now required to meet a conservation standard equal to the amount of a shortage. A water agency that projects it would have a 10% supply shortfall, for example, would have a mandatory conservation standard of 10%. The regulation also makes previously passed water-wasting rules permanent, including no hosing of sidewalks, washing cars without a hose nozzle, or watering lawns within 48 hours of measurable rainfall.

“El Nino didn’t save us, but this winter gave us some relief,” Water Board Chair Felicia Marcus said in a statement. “It’s a reprieve though, not a hall pass, for much if not all of California. We need to keep conserving, and work on more efficient practices, like keeping lawns on a water diet or transitioning away from them. We don’t want to cry wolf, but we can’t put our heads in the sand either.”

Will Sarni, director and practice leader of water strategy at Deloitte, agrees with the direction the state is taking on conservation.

While it may appear that restrictions are being eased, which could send the message that things are going back to business as usual, “It’s not business as usual, but local entities are being given more control,” Sarni said. “My view is that water is ultimately a local issue, so providing greater flexibility and decision-making at the local level that aligns with an overall strategy within the state, or nation, makes sense.”

The model of local management actions that roll up to a regional entity have successfully been adopted in other parts of the country, he said, explaining that states do work together. One example is the Delaware River Basin Commission, which is an entity that has a say in how water is managed in the Delaware River. Other examples include the Great Lakes Commission and the Colorado River Compact. “So cooperating on water is actually more common than not,” Sarni said.

Drought1

Drought 2

Houston Faces ‘Largest Flooding Event Since Tropical Storm Allison’

Historic flooding has left the Houston metropolitan area inundated once again this week, killing at least seven people, flooding 1,000 homes and causing more than $5 billion in estimated damages in Harris County alone. Gov. Greg Abbott declared a state of disaster for nine counties in and around the Houston area. The widespread nature of the disaster prompted the city of Houston to call this the largest flood event since Tropical Storm Allison, which devastated southeast Texas in 2001, causing $9 billion in damage and $1.1 billion in insured losses.

According to Harris County Judge Ed Emmett, about 240 billion gallons of rain fell on the Houston area this week. That’s the equivalent of 363,400 Olympic-size swimming pools, CNN reported. After 10 inches of rainfall fell in six hours Sunday night into Monday, powerful, slow-moving thunderstorms had paralyzed the region Monday, but storms continued through Wednesday.

Having some of the hardest rainfall overnight helped a bit to mitigate the dangers this week. While this made it difficult to predict, it allowed people to better make choices about going out, as opposed to last year’s floods around Memorial Day, Emmett told the Houston Chronicle. Nevertheless, emergency crews made more than 1,200 high-water rescues, many residents had to evacuate to shelters, and for those who were able to shelter in place, 123,000 homes had no power at the height of the flooding. Officials have also expressed concern about two local dams that have been rated “extremely high risk and are at about 80% capacity, but they are not in immediate danger of failing.

As I wrote in Risk Management last year, the city’s rapid urbanization and approach to land development have made it extremely vulnerable to flooding perils because there is little land surface that can absorb water in foul weather. Rivers, bayous and other receptacles for runoff are easily overwhelmed and take a considerable amount of time to return to normal levels, making the heavy, concentrated, sustained rainfall seen this week even more dangerous in such an urbanized setting. Last May, record rainfall and severe thunderstorms caused tremendous damage across Texas and Oklahoma, killing 32 people and flooding more than 5,000 homes in the metro regions of Houston, Austin and Dallas.

With this latest storm, Houston again offers a powerful reminder about the natural catastrophe perils compounded by urbanization and the need to prepare, both in the form of routine disaster preparation and urban planning. From the August issue of Risk Management:

The city has invested hundreds of millions of dollars to battle the effects of urbanization. On Buffalo Bayou alone, for example, flood control efforts totaling half a billion dollars in the past decade have included bridge replacements, the addition of detention ponds for runoff, and creation of green spaces that serve as parks in normal weather while offering more land surface that can absorb water in foul weather.

But the investments are not enough. “Houston may be doing things to try to improve…but there’s a long history of pre-existing stuff that is still there,” Walter Peacock, an urban planning professor at Texas A&M and director of the school’s Hazard Reduction and Recovery Center, told Time. “Think about every time you put in a road or a mall and you add concrete—you’ve lost the ability of rain to get into the soil and you’ve lost that permeability. It’s now impermeable, and therefore you get more runoff.”