Water way to scam your insurance company

11 Mar 2021

COVID-19 and fraudulent Escape of Water claims

Like a rising tide, fraud in escape of water claims is on the increase and is likely to escalate even further due to the global pandemic. 



General Escape of Water trends

Escape of Water claims account for over a quarter of all property damage claims and are the largest single type of claim within property damage by volume. It is estimated that escape of water claims cost the insurance industry £2.5 million a day, according to the Association of British Insurers (“ABI”). Not only is the volume of claims increasing on a yearly basis, but so is the average value, predominantly due to the popularity of expensive home based technology. The cost of an average claim was determined to be £3,424 by the ABI in 2018, which was a big increase on previous data. This trend is likely to continue during and post pandemic as we continue to spend more time in our homes, many of us working full time with expensive technology to support homeworking. The pandemic is also likely to contribute further to the increase of Escape of Water claims, due to an increase of DIY projects being undertaken (badly) by homeowners and landlords as many seek to improve the quality of the space with minimal financial resource, but more importantly, without skilled professionals. 

Other trends such as the establishment of plastic ‘push-fit’ piping and the degradation age of Victorian era plumbing being reached in many homes, has also contributed to a gentle increase in this already significant area. The industry’s awareness of fraud in Escape of Water claims is also growing and there is a current increase in recognised fraudulent activity in this area. This type of fraud is seen as an easy win with fraudsters operating under the impression that tampering with pipework and evidencing substantial damage from a water escape is a crime that will be undetectable by insurers.

COVID-19 and Fraudulent Escape of Water claims

Covid-19 is amplifying this too as many businesses struggle under the financial impact of lockdown, with those financial pressures potentially making the temptation of a perceived ‘easy pay-out’ too enticing for some. Additionally, as many commercial premises, containing stock, will be sat unoccupied for long periods of time (and access to the properties being potentially restricted due to Government imposed limitations) there may also be an enticement to exaggerate genuine claims in an attempt to make the best of a bad situation.    

BLM’s Escape of Water Fraud expertise

Given the volume and value of Escape of Water claims, this is a cause for concern. BLM is an industry strategic partner and is actively seeking to eradicate this type of activity, in addition to fighting those detected and offering litigation and prosecution services. 

Raising industry awareness, particularly during these times where an unfortunate mix of circumstances is providing motivation for even the most unsuspecting policyholder to consider making such a claim, is of utmost importance. Maintaining a pro-active lookout for fraudulent claims indicators, at all levels is therefore more important now than ever. BLM holds extensive cross-border data on fraud and our BLM Fraud Sentry intelligence system screens claims to identify instances of potential fraud early in the process. To find out more about BLM Fraud Sentry, speak to our team here

We are keen to share knowledge and experiences with the insurance industry to highlight the red flags and improve fraudulent claims detection on investigation, as well as reflecting on wider risk mitigation tips to minimise exposure to Escape of Water claims, genuine or otherwise.

For further information and assistance on how insurance handlers can undertake best practice in early detection of fraudulent escape of water claims, click here

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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.

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Related contacts

Jacob Broughton

Jacob Broughton


John O'Shea

John O'Shea

Partner and head of property damage practice group,

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