Escape of water caps leaving policyholders exposed – Prestige Underwriting

Fixed payout caps on escape of water incidents could be leaving many customers – especially those with unoccupied or holiday home properties – exposed to a severe protection gap.

This is according to MGA Prestige Underwriting, which further warned that, with costs and severities of escape of water incidents increasing, policyholders may find their capped cover increasingly inadequate.

Indeed, the firm revealed that so far in 2026 the cost of escape of water incidents in unoccupied or holiday homes has exceeded £20,000 in 41.4% of claims and £50,000 in 22.4% of claims.

Prestige highlighted that unoccupied or partially occupied properties had a higher likelihood of exceeding policy caps, as “leaks may go undetected for longer, allowing damage to spread and reinstatement costs to escalate”.

In response to its findings, the MGA has suggested that brokers discuss the “true cost” of such incidents with their clients, as well as the limitations of capped cover and the importance of preventative measures.

Severe, costly and disruptive

Tim Baxter, business development and relationship director at Prestige Underwriting, said: “Escape of water losses can be severe, costly and highly disruptive. A fixed escape of water cap may look simple on paper, but our claims data shows it can create a very real protection gap.

“Our view is that brokers and customers deserve a better conversation and access to effective choice. By asking customers to take sensible preventative steps, we can help them retain access to more meaningful protection, while also reducing the likelihood and severity of a loss.

“For many customers, that means understanding the importance of simple preventative measures such as turning off the main water supply and fully draining the domestic cold-water system when a property is left unoccupied.”