Not just a pipe dream: agents and brokers can increase their value by assessing clients' water-damage exposures.

Insurers nationwide have felt the financial strain of a rising number of water damage claims, including mold, during recent years. As a result, many insurers have tightened their policies and excluded certain perils. With stricter policy terms and conditions, insurance agents and brokers can increase their value by assessing their clients' water-damage exposures and helping them select coverage that adequately addresses their needs. Agents also can explain prevention tips to help their clients reduce risk.

Every homeowner has a risk of water damage. According to a 2004 national survey of 1,633 people, nearly one-third--32%--of the respondents experienced some form of water damage, 21% experienced water damage once, and 11% experienced it more than two times.

A home can sustain water damage internally and externally. The survey, conducted by Impulse Research, found that basement leakage caused damage for 23% of the affected respondents and roof leakage affected 24%.

Flawed caulking in bathrooms and kitchens, defective appliances and burst pipes can cause internal water damage. According to the survey, poor plumbing and caulking caused water damage to 31% of the affected respondents, leaks from air conditioners and washing machines affected 24% and burst pipes affected 22%.

Many water-damage risks are preventable, but some can be impossible to prevent. If a client is living in an apartment building and a neighbor's apartment becomes flooded, water damage can be unavoidable.

When water threatens to damage homes, homeowners must give the problem immediate attention. Left unattended, water leaks can cause mold to spread and even wood to rot. Wood rot can lead to devastating structural damage to a home. In addition, water damage can easily harm furniture, artwork, clothing, electronic equipment and other possessions.

If homeowners address the water leakage problems immediately, they can reduce potential losses. Agents and brokers can save clients both money and time by explaining loss prevention and early detection techniques.

Agents and brokers can assess clients' water-damage exposures by asking these key questions:

* How old is your water heater? The average life span of a water heater is seven to 10 years.

* How often do you inspect washing machine hoses? The Impulse survey found that 40% of respondents checked the hoses at least once a year, but 32% never checked them.

* Do you know where the water shut off valves are in your home?

* Do you periodically inspect your basement's foundation walls and floors for cracks that might allow seepage?

Other factors clients should consider can be found at www.chubb.com/personal/html/helpful_tips_home_ basement.html.

Agents also can advise their clients to install moisture or water-detection systems. These systems range from inexpensive stand-alone, battery-operated devices to water-leak and flow-detection devices for the whole house. If a leak occurs while the homeowner is away, some devices can detect a drop in water pressure and shut off the water supply. As a result, some insurers will now provide a premium credit when the devices are installed.

It also is important for agents to explain water damage clauses in homeowners policies because each policy provides different coverage. According to the Impulse survey, insurance companies covered the full cost of water damage in only one in every four cases (26%), and 47% of the time insurance covered none of the loss.

Many homeowners assume their insurance policies cover more than they actually do. Typically, homeowners policies cover water damage caused by sudden and accidental problems like a burst pipe. Some policies also cover losses caused by backed-up sewers and drains. Flood losses, however, are excluded, but can be covered separately under the National Flood Insurance Program.

In response to rising mold-related losses, many insurers have excluded remediation coverage or have capped it at relatively low limits during the past few years. Some insurers of higher-valued homes offer more mold remediation coverage options. Agents should advise their customers accordingly when additional limits by endorsement are available. However, regardless of the amount of coverage, ambient moisture remains excluded in most policies.

Agents can save their clients time, money and headaches by helping to assess water-damage exposures, offering risk-reduction tips and explaining coverage options. Clients will be grateful when they realize the goal of a secure home is more than just a leaky pipe dream.

Andrew McElwee, a Best's Review columnist, is executive vice president of Chubb & Son and chief operating officer of Chubb Personal Insurance, Whitehouse Station, N.J. He can be reached at [e-mail].