9 Smart Ways to Prepare Homes for Winter and Reduce Claims

Winter home preparation starts with finding the smart solutions, from whole-house generators to water shut-off systems. Here are a few more winterization tips for your high net worth clients.
By: and | December 19, 2018 • 7 min read

Expensive homes can mean expensive claims, particularly during harsh winters. Water damage from ice dams and frozen pipes and structural damage from falling limbs cause losses that can quickly escalate, especially in unoccupied or secondary homes, where it may go undetected for days or weeks.

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“We look at data  from past events and see how that information can influence our member’s behavior,” said Jason Metzger, SVP, risk management, PURE Insurance. He explained that from a cold snap in February 2015, which spanned from Virginia to Maine, PURE was able to prepare for a cold snap in the winter of January 2018.

“The January 2018 event was really a nonevent,” he said. And that was because they were able to prepare their members for the dangers of water in the winter.

From full-house generators to smart thermostats, the best way to stop winter’s wrath is to prevent it.

1) Install a leak detection and emergency water shut-off system.

These devices shut off a home’s water supply if they detect abnormalities in water pipes. Together with a low-temperature sensor, this can be tremendously helpful if a home is going to be unoccupied for an extended period of time during the winter months.

“Some of the biggest losses I see on a regular basis are from water leaks or water entering the home,” said Jason Ott, director of field operations, Aon Private Risk Management. “You want to stop water as soon as possible. Being aware of water and being able to stop it will help you mitigate the situation.

“The longer a house sits with water, the bigger the loss,” he said.

A water shut-off system, then, can help set parameters on what is a normal amount of water use for a home. Anything ancillary to that typical amount will trigger the system to shut it off.

Having this system connected to home alarm systems can also alert the homeowner immediately when the water is shut off, enabling them to check in on the occupancy and act quickly on any damage.

2) Inspect and update your roofs.

Water can drip down, refreeze and create dams that can block drains and ultimately weaken your roof, putting it at risk of collapsing, said Mike Gulla, director of underwriting at Hippo Insurance.

Jason Ott, director of field operations, Aon Private Risk Management

Ice dams are one of the biggest causes of winter damage and older roofs have a higher chance of forming them than those built in the last 10 years. Flat roofs are particularly high-risk and should routinely have snow removed.

Additionally, “some companies have different levels of coverage depending on the age of a roof,” said Ott. Therefore, updating the roof might lead to better costs in premium or a better payout at the time of a loss.

Other good roof practices would be to check the roof flashing, making sure it’s in good condition and can prevent water penetration, and trimming back trees and dead branches that could cause damage to the roof in a storm, said Gulla.

3) Consider installing heat strips on gutters and/or roof edges to prevent ice dams from forming.

Ice dams are most common on the northern and eastern slopes of the home. Heat strips can actively stop them from forming.

4) Have a contractor inspect the insulation and pipes in your attic to avoid heat loss or water leaks.

A well-insulated attic will help keep a home’s heat from melting the snow on the roof, which is another potential contributor to ice dams.

Hippo’s Gulla suggested that homeowners insulate the attic and make sure its ventilated. “This will allow cool air to move through your attic while insulation seals the heat within your home,” he said.

A water shut-off device will also be a lifesaver when it comes to attic insulation. Metzger said this device shouldn’t be limited to cold-weather climates “Even just a few days of 20 degree weather in the southern states can cause a pipe to burst. And that usually comes down to the way the attic is insulated.”

A frozen pipe can cause more than $5,000 in water damage, according to the Insurance Institute for Business and Home Safety.

“When water expands and freezes, it can put a tremendous amount of pressure on plumbing pipes,” said Gulla.

5) Winterize your swimming pool and irrigation system and upgrade your outdoor faucets to frost-free ones.

If outdoor systems are connected to a faucet that leads to indoor piping, the outdoor systems can freeze, causing pressure on indoor pipes, which can then potentially burst. Outdoor faucets should be covered and water turned off to prevent the faucet tube from bursting in freezing conditions.

6) Install a whole-house generator.

Whole-house generators can restore electricity during power outages, helping prevent losses from interruptions to heating systems or central alarms.

When electricity is out, heating systems can fail, said Ott. “With no electricity, no heating, pipes can burst.”

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And, he said, this could be a bigger issue than just flooding or related water damage. Fine art hung on walls that house pipes can be destroyed by a leaking pipe.

“For fine art, outside of transit, it’s water damage” that acts as the biggest cause of loss.

But loss of electricity can be avoided; clients who proactively seek our a generator before a major storm can preempt an event in a cost-effective manner. Most vendors recommend putting in generators during the fall, before the ground freezes. However, sometimes installation of a whole-house generator might slip off the radar. In that case, Metzger said, “we work with our partners to see where we can do it. There’s always the portable options available to get us to the spring when we can work towards the whole-home solution.”

7) Consider installing a smart thermostat.

Ideally, the heat in a home should be set to at least 65 degrees. A smart thermostat allows control of a home’s temperature remotely and alerts homeowners to dramatic temperature changes that might cause problems. Once colder weather arrives permanently, interior doors, cabinets and vanities should be left open, so the whole home is heated.

Sarah Aguirre, northeast client advisory leader, Marsh Private Client Services

“The installation of a smart thermostat is a great way to be able to control temperature settings right from your smart phone or tablet. This technology can be very convenient for clients who travel frequently or who do not have a caretaker who is regularly checking on a secondary or vacation home,” said Sarah Aguirre, northeast client advisory leader, Marsh Private Client Services.

“Maintaining a consistent temperature during the colder months can help to prevent frozen pipes while on vacation or for homes that are not frequently occupied during the winter. This is an inexpensive and simple way to maintain the temperature in your residence and help to protect against the unnecessary freezing of pipes.” 

Metzger recommends smart thermostats be kept around 65 degrees. “Some can also protect you from a burst pipe,” he said. “It can alert you to water damage, which can give you enough time to get an indication or a head start on stopping damage.”

8) Arrange weekly inspections for secondary or unoccupied homes.

If a property is going to be unoccupied during the winter, it should be inspected by a caretaker or relative on a weekly basis — especially if there isn’t a water shut-off product installed. Provisions should also be made for snow removal. This makes the house appear occupied and ensures reliable access to the property for fuel delivery and emergencies.

“There are many benefits to having weekly inspections of secondary and unoccupied homes especially during the winter months. These inspections can ensure that the temperature is being properly maintained to help avoid frozen pipes, uncover water leaks or more potentially severe issues such as ice damming or damages to the roof resulting from winter storms,” said Aguirre.

“There’s never too many layers of protection,” added Metzger.

He shared one scenario: PURE had a member who did not have a water shut off system installed but did have a caretaker checking in on their home. They also had an alarm system that kept detecting movement. The caretaker accessed the home to discover a pipe had burst and the movement was the dripping of water. The member was able then to stop some of the damage before it got too out of hand.

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“Scheduling regular inspections not only helps our clients to proactively protect their homes,” Aguirre said, “but by identifying an issue early they can prevent potentially devastating damages to their homes.”

In addition, Ott added that it would be wise to check in with the insurance company or a broker to see if there’s a discount offered for clients who have a caretaker checking in.

“Sometimes insurance will add a surcharge if no one is checking in,” he said. Likewise, insurance might offer that discount if a client shows they’re actively protecting their home.

9) Have the trees on your property inspected and treated in the fall or early winter.

Temperature fluctuations, ice, and heavy snow, combined with wind and other winter conditions can weaken trees. If they fall or break, they could injure someone, knock out electricity or damage homes, cars and other property. &

Autumn Heisler is the digital producer and a staff writer at Risk & Insurance®. She can be reached at [email protected]

Exclusive | Hank Greenberg on China Trade, Starr’s Rapid Growth and 100th, Spitzer, Schneiderman and More

In a robust and frank conversation, the insurance legend provides unique insights into global trade, his past battles and what the future holds for the industry and his company.
By: | October 12, 2018 • 12 min read

In 1960, Maurice “Hank” Greenberg was hired as a vice president of C.V. Starr & Co. At age 35, he had already accomplished a great deal.

He served his country as part of the Allied Forces that stormed the beaches at Normandy and liberated the Nazi death camps. He fought again during the Korean War, earning a Bronze Star. He held a law degree from New York Law School.

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Now he was ready to make his mark on the business world.

Even C.V. Starr himself — who hired Mr. Greenberg and later hand-picked him as the successor to the company he founded in Shanghai in 1919 — could not have imagined what a mark it would be.

Mr. Greenberg began to build AIG as a Starr subsidiary, then in 1969, he took it public. The company would, at its peak, achieve a market cap of some $180 billion and cement its place as the largest insurance and financial services company in history.

This month, Mr. Greenberg travels to China to celebrate the 100th anniversary of C.V. Starr & Co. That visit occurs at a prickly time in U.S.-Sino relations, as the Trump administration levies tariffs on hundreds of billions of dollars in Chinese goods and China retaliates.

In September, Risk & Insurance® sat down with Mr. Greenberg in his Park Avenue office to hear his thoughts on the centennial of C.V. Starr, the dynamics of U.S. trade relationships with China and the future of the U.S. insurance industry as it faces the challenges of technology development and talent recruitment and retention, among many others. What follows is an edited transcript of that discussion.


R&I: One hundred years is quite an impressive milestone for any company. Celebrating the anniversary in China signifies the importance and longevity of that relationship. Can you tell us more about C.V. Starr’s history with China?

Hank Greenberg: We have a long history in China. I first went there in 1975. There was little there, but I had business throughout Asia, and I stopped there all the time. I’d stop there a couple of times a year and build relationships.

When I first started visiting China, there was only one state-owned insurance company there, PICC (the People’s Insurance Company of China); it was tiny at the time. We helped them to grow.

I also received the first foreign life insurance license in China, for AIA (The American International Assurance Co.). To date, there has been no other foreign life insurance company in China. It took me 20 years of hard work to get that license.

We also introduced an agency system in China. They had none. Their life company employees would get a salary whether they sold something or not. With the agency system of course you get paid a commission if you sell something. Once that agency system was installed, it went on to create more than a million jobs.

R&I: So Starr’s success has meant success for the Chinese insurance industry as well.

Hank Greenberg: That’s partly why we’re going to be celebrating that anniversary there next month. That celebration will occur alongside that of IBLAC (International Business Leaders’ Advisory Council), an international business advisory group that was put together when Zhu Rongji was the mayor of Shanghai [Zhu is since retired from public life]. He asked me to start that to attract foreign companies to invest in Shanghai.

“It turns out that it is harder [for China] to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

Shanghai and China in general were just coming out of the doldrums then; there was a lack of foreign investment. Zhu asked me to chair IBLAC and to help get it started, which I did. I served as chairman of that group for a couple of terms. I am still a part of that board, and it will be celebrating its 30th anniversary along with our 100th anniversary.

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We have a good relationship with China, and we’re candid as you can tell from the op-ed I published in the Wall Street Journal. I’m told that my op-ed was received quite well in China, by both Chinese companies and foreign companies doing business there.

On August 29, Mr. Greenberg published an opinion piece in the WSJ reminding Chinese leaders of the productive history of U.S.-Sino relations and suggesting that Chinese leaders take pragmatic steps to ease trade tensions with the U.S.

R&I: What’s your outlook on current trade relations between the U.S. and China?

Hank Greenberg: As to the current environment, when you are in negotiations, every leader negotiates differently.

President Trump is negotiating based on his well-known approach. What’s different now is that President Xi (Jinping, General Secretary of the Communist Party of China) made himself the emperor. All the past presidents in China before the revolution had two terms. He’s there for life, which makes things much more difficult.

R&I: Sure does. You’ve got a one- or two-term president talking to somebody who can wait it out. It’s definitely unique.

Hank Greenberg: So, clearly a lot of change is going on in China. Some of it is good. But as I said in the op-ed, China needs to be treated like the second largest economy in the world, which it is. And it will be the number one economy in the world in not too many years. That means that you can’t use the same terms of trade that you did 25 or 30 years ago.

They want to have access to our market and other markets. Fine, but you have to have reciprocity, and they have not been very good at that.

R&I: What stands in the way of that happening?

Hank Greenberg: I think there are several substantial challenges. One, their structure makes it very difficult. They have a senior official, a regulator, who runs a division within the government for insurance. He keeps that job as long as he does what leadership wants him to do. He may not be sure what they want him to do.

For example, the president made a speech many months ago saying they are going to open up banking, insurance and a couple of additional sectors to foreign investment; nothing happened.

The reason was that the head of that division got changed. A new administrator came in who was not sure what the president wanted so he did nothing. Time went on and the international community said, “Wait a minute, you promised that you were going to do that and you didn’t do that.”

So the structure is such that it is very difficult. China can’t react as fast as it should. That will change, but it is going to take time.

R&I: That’s interesting, because during the financial crisis in 2008 there was talk that China, given their more centralized authority, could react more quickly, not less quickly.

Hank Greenberg: It turns out that it is harder to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.

R&I: Obviously, you have a very unique perspective and experience in China. For American companies coming to China, what are some of the current challenges?

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Hank Greenberg: Well, they very much want to do business in China. That’s due to the sheer size of the country, at 1.4 billion people. It’s a very big market and not just for insurance companies. It’s a whole range of companies that would like to have access to China as easily as Chinese companies have access to the United States. As I said previously, that has to be resolved.

It’s not going to be easy, because China has a history of not being treated well by other countries. The U.S. has been pretty good in that way. We haven’t taken advantage of China.

R&I: Your op-ed was very enlightening on that topic.

Hank Greenberg: President Xi wants to rebuild the “middle kingdom,” to what China was, a great country. Part of that was his takeover of the South China Sea rock islands during the Obama Administration; we did nothing. It’s a little late now to try and do something. They promised they would never militarize those islands. Then they did. That’s a real problem in Southern Asia. The other countries in that region are not happy about that.

R&I: One thing that has differentiated your company is that it is not a public company, and it is not a mutual company. We think you’re the only large insurance company with that structure at that scale. What advantages does that give you?

Hank Greenberg: Two things. First of all, we’re more than an insurance company. We have the traditional investment unit with the insurance company. Then we have a separate investment unit that we started, which is very successful. So we have a source of income that is diverse. We don’t have to underwrite business that is going to lose a lot of money. Not knowingly anyway.

R&I: And that’s because you are a private company?

Hank Greenberg: Yes. We attract a different type of person in a private company.

R&I: Do you think that enables you to react more quickly?

Hank Greenberg: Absolutely. When we left AIG there were three of us. Myself, Howie Smith and Ed Matthews. Howie used to run the internal financials and Ed Matthews was the investment guy coming out of Morgan Stanley when I was putting AIG together. We started with three people and now we have 3,500 and growing.

“I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

R&I:  You being forced to leave AIG in 2005 really was an injustice, by the way. AIG wouldn’t have been in the position it was in 2008 if you had still been there.

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Hank Greenberg: Absolutely not. We had all the right things in place. We met with the financial services division once a day every day to make sure they stuck to what they were supposed to do. Even Hank Paulson, the Secretary of Treasury, sat on the stand during my trial and said that if I’d been at the company, it would not have imploded the way it did.

R&I: And that fateful decision the AIG board made really affected the course of the country.

Hank Greenberg: So many people lost all of their net worth. The new management was taking on billions of dollars’ worth of risk with no collateral. They had decimated the internal risk management controls. And the government takeover of the company when the financial crisis blew up was grossly unfair.

From the time it went public, AIG’s value had increased from $300 million to $180 billion. Thanks to Eliot Spitzer, it’s now worth a fraction of that. His was a gross misuse of the Martin Act. It gives the Attorney General the power to investigate without probable cause and bring fraud charges without having to prove intent. Only in New York does the law grant the AG that much power.

R&I: It’s especially frustrating when you consider the quality of his own character, and the scandal he was involved in.

In early 2008, Spitzer was caught on a federal wiretap arranging a meeting with a prostitute at a Washington Hotel and resigned shortly thereafter.

Hank Greenberg: Yes. And it’s been successive. Look at Eric Schneiderman. He resigned earlier this year when it came out that he had abused several women. And this was after he came out so strongly against other men accused of the same thing. To me it demonstrates hypocrisy and abuse of power.

Schneiderman followed in Spitzer’s footsteps in leveraging the Martin Act against numerous corporations to generate multi-billion dollar settlements.

R&I: Starr, however, continues to thrive. You said you’re at 3,500 people and still growing. As you continue to expand, how do you deal with the challenge of attracting talent?

Hank Greenberg: We did something last week.

On September 16th, St. John’s University announced the largest gift in its 148-year history. The Starr Foundation donated $15 million to the school, establishing the Maurice R. Greenberg Leadership Initiative at St. John’s School of Risk Management, Insurance and Actuarial Science.

Hank Greenberg: We have recruited from St. John’s for many, many years. These are young people who want to be in the insurance industry. They don’t get into it by accident. They study to become proficient in this and we have recruited some very qualified individuals from that school. But we also recruit from many other universities. On the investment side, outside of the insurance industry, we also recruit from Wall Street.

R&I: We’re very interested in how you and other leaders in this industry view technology and how they’re going to use it.

Hank Greenberg: I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.

R&I: So as the pre-eminent leader of the insurance industry, what do you see in terms of where insurance is now an where it’s going?

Hank Greenberg: The country and the world will always need insurance. That doesn’t mean that what we have today is what we’re going to have 25 years from now.

How quickly the change comes and how far it will go will depend on individual companies and individual countries. Some will be more brave than others. But change will take place, there is no doubt about it.

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More will go on in space, there is no question about that. We’re involved in it right now as an insurance company, and it will get broader.

One of the things you have to worry about is it’s now a nuclear world. It’s a more dangerous world. And again, we have to find some way to deal with that.

So, change is inevitable. You need people who can deal with change.

R&I:  Is there anything else, Mr. Greenberg, you want to comment on?

Hank Greenberg: I think I’ve covered it. &

The R&I Editorial Team can be reached at [email protected]