Water damage from leaks is becoming an uninsurable risk, but new technology could help.
With more than 40 states expected to experience water shortages by 2024, according to the U.S. Environmental Protection Agency, addressing water conservation issues in meaningful ways has become an increasingly urgent priority for Americans.
As building owners and government agencies look for ways to curb water waste, one key element is addressing leaks throughout the water system, which account for 14 out of every 100 gallons of water wasted.
From an insurance company's perspective, water damage caused by water leaks is becoming an uninsurable risk. All buildings will eventually experience some water-related damage, but the causes and severity can vary widely, making it nearly impossible to estimate the cost. As a result, deductibles have skyrocketed, placing much of the financial responsibility for water damage on the building owners themselves.
However, emerging AI-powered technologies are providing new insight into the causes of water damage and overall water use patterns in large buildings. By doing so, you may be able to repair leaks before they cause major damage, and the financial burden of water damage will be more predictable.
Sensors have been part of buildings for decades, but they are now used in a much wider range of applications, even though prices have dropped by thousands of dollars. Their effectiveness has also increased dramatically.
new and improved
We have evolved beyond the first wave of water detection sensors that had one simple purpose: to send an alarm when water was detected on a surface. The second generation of sensors is much more sophisticated and uses AI machine learning to monitor and analyze water flow dynamics and usage patterns over time.
For example, water usage on a given Tuesday can be compared to the previous Tuesday, and sensors can detect changes in patterns hourly or minute by minute. If the sensor detects higher than normal water usage, which is evidence of a water leak, it will alert the user so they can investigate the problem. Not only that, but the algorithm learns over time to identify water usage patterns and reduce false alarms.
Next-generation sensors take these insights a step further. Artificial intelligence and machine learning can now understand the unique frequencies of pipes, similar to microphones, allowing changes to be detected from deep within buildings. Taking this technology further could potentially accurately detect when equipment is nearing the point of failure. This could potentially allow building managers to perform preventive maintenance before a failure occurs and minimize subsequent damage.
New technology has also made it easier to manage the vast amounts of data collected by sensors without the need for large central systems. Instead of installing computer hubs in buildings, cloud computing now allows data to be aggregated into a single online interface that can be accessed from anywhere.
All of this is happening just as a paradigm shift in microinsurance is occurring. Insurance will now dynamically adjust to the actions of the insured, and that ongoing relationship will allow for risk mitigation over time. Insurers can continually change insurance prices and work with insureds to improve their insurance habits over time.
As data is accumulated from buildings equipped with sensors, it will soon be possible to develop “automated actuarial tables” that can price risks based on real-time data inside buildings. A variety of other data can be taken into account, such as historical failure rates of individual building components and the average temperature, humidity, and weather patterns of the city in which the building is located.
The better you understand water usage patterns, the easier it will be to focus on the areas that need the most improvement, from building design to break-prone equipment to the wasteful habits of building occupants. With these technological tools at their disposal, the insurance industry can drive the adoption of new water conservation standards, leading to more responsible water use and reduced waste.
Dr. Dennis Shelden is a pioneering B2B platform aggregator that integrates building sensors, installation, insurance, financing, and artificial intelligence/machine learning to predict, mitigate, and minimize losses for building owners due to water damage. Chief Technology Strategist and Co-Founder of InsureTEK. other hazards. Dr. Shelden holds three degrees from MIT and is an internationally recognized architect, scholar, author, and entrepreneur with a focus on the intersection of architecture, engineering, and information technology. He is an associate professor at Rensselaer Polytechnic Institute in New York, where he serves as director of his CASE Center for Architecture, Science, and Ecology and co-director of his EBESS Institute for Energy, Built Environment, and Smart Systems.
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