Do you have copper pipes?  Are they leaking?  Do you have a high water bill?

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Jacksonville       Duval County                 904-346-1266
St Augustine      St Johns County             904-824-7144
Orange Park       Clay County                   904-264-6444
Jacksonville Beaches    Duval County      904-246-3969
Fernandina          Nassau County               904-277-3040
Macclenny          Baker County                 904-259-5091
Palm Coast         Flagler County                386-439-5290
Daytona              Volusia County               386-253-4911

GAINESVILLE    ALACHUA COUNTY       352-335-8555
Serving all of Florida  and Georgia    at     904-346-1266

EMAIL LARRY@1STPROP.COM (feel free to email your bidding packages here)

Internal pitting corrosion of copper pipes is a rare but costly problem that leads to the formation of pinhole leaks. Although the factors that cause this problem are mostly unknown, it is well recognized that the chemistry of the water traveling through the pipes can influence the formation and propagation of pits.

Pinhole leaks are a major concern to homeowners as they may:

• be costly, given the effort required to find and repair each leak
• result in highly variable amounts of water damage per occurrence
• lead to loss of water resources from undetected leaks in service laterals
• lead to growth of mold and mildew
• result in higher premiums for or cancellation of homeowner insurance

There is also a legitimate concern for consumers that one leak might soon follow another. Insurance companies often raise premiums or simply do not renew policies, and homeowners distraught over leaks can reach the point they do not feel comfortable leaving the house without first turning off the water.

What is a Pinhole Leak?

A pinhole leak is a final breakthrough event of the progressive attack of pitting corrosion on copper water plumbing. A copper water plumbing system can be in a condition of having significant damage by pitting corrosion, but not have pinhole leaks. The challenge is how to discover pitting corrosion before pinhole leaks develop. Figures 1 and 2 show a pinhole leak in a copper pipe.

The State of Maryland Task Force to Study Pinhole Leaks in Copper Plumbing defines a copper pinhole leak as “the perforation of copper tube, pipe or fittings used for domestic water distribution as the result of pitting corrosion initiated on the interior/waterside surface with the subsequent leakage of water.”

How Many Homes are Affected?

There is no comprehensive source of information on the occurrence of pinhole leaks. Many utilities and water authorities have collected thousands of reports, submitted voluntarily by residents who have experienced pinhole leaks. Often, homeowners consider pinhole leaks as a plumbing problem, and do not report them to their water utility.

Where Do Pinhole Leaks Happen Most Often?

Although pinhole leaks could happen in any copper pipe or tube within a house, the Washington Suburban Sanitary Commission (WSSC) reported that the majority of pinhole leaks that their customers had reported were in cold-water, horizontal copper piping. Most of the leaks were in older homes, and 80 percent of the reports involved homes built prior to 1970.

What is Copper Piping and Why is it Used?

Copper piping has been used for domestic water supply for over 50 years. Since 1963, over 5.3 million miles of copper plumbing tube has been installed in about 80 percent of all U.S. buildings. Copper is the most widely used material for plumbing systems because of its ease of use, resistance to corrosion, and resistance to permeation by liquids and gases, which may be sources of corrosion and contamination.

Copper tubing used for domestic water supply and distribution is manufactured to meet specification B88, Standard Specification for Seamless Copper Water Tube, established by the American Society for Testing and Materials (ASTM). According to the Copper Development Association Inc.’s Copper Tube Handbook:

“All tube supplied to these ASTM standards is a minimum of 99.9 percent pure copper and silver combined. The copper customarily used for tube supplied to these specifications is deoxidized with phosphorus and referred to as C12200 (Copper No. 122) or DHP Copper. Other coppers may also be used.”

In addition to copper, there is a maximum of 0.04 percent phosphorus in copper tubing. The techniques for manufacturing copper piping are the same now as they have been for decades.

Copper (Pitting) Corrosion

There are many forms of corrosion, but pitting corrosion is most likely to culminate in pinhole leaks in copper plumbing. Pitting corrosion is the non-uniform localized attack of the wall of copper tube, pipe, or fittings initiated on the interior/waterside surface in the domestic water distribution system, in which only small areas of the metal surface are attacked, while the remainder is largely unaffected. Pitting corrosion starts on metal surfaces for unknown reasons, and some combinations of water chemistry factors allow the process to continue while some do not. Pitting corrosion can be classified into three types:

Type I pitting is associated with hard or moderately hard waters with a pH between 7 and 7.8, and it is most likely to occur in cold water. The pitting is deep and narrow, and results in pipe failure.

Type II pitting occurs only in certain soft waters, with a pH below 7.2 and occurs rarely in temperatures below 140° F. The pitting that occurs is narrower than in Type I, but still results in pipe failure.

Type III pitting occurs in cold soft waters having a pH above 8.0. It is a more generalized form of pitting, which tends to be wide and shallow and results in blue water, byproduct releases, or pipe blockage.

What Causes Pinholes?

Several studies and research projects have been conducted to determine the possible cause of pinhole leaks in copper pipes, but no definitive causes have been established. Some blame it on the chemicals in the water, while others blame it on workmanship and temperature gradients. The list below illustrates the different variables that are thought to cause pinhole leaks. These variables demonstrate the complexity of trying to pinpoint the suspected causes.

Possible Causes	Study or Research
Combination of high pH, low organic matter, aluminum solids, and free chlorine	Virginia Tech, study commissioned by WSSC, December 2004
Aggressive water, poor workmanship, and addition of water softeners	University of Florida School of Building Construction (1997)
Workmanship: Excessive use of fluxes; fluxes are corrosive by their nature	AWWA Research Foundation and DVGW-Technologiezentrum Wasser, 1996
Aluminum-bearing compounds (from concrete pipes, cement mortar lining of cast iron pipes, aluminum coagulant carryover from treatment plants)	Final report on Maryland Task Force on Pinhole Leaks in Copper Pipes
Combination of: use of soft waters with low pH; high suspended solids and assimilable organic carbon content; long-term or periodic water stagnation; low or nonexistent chlorine levels; maintenance of water temperatures that promote rapid growth and activity of naturally occurring bacteria; and/or the lack of an adequate monitoring program to periodically evaluate water quality and pipe wall condition	Journal AWWA, August 2001, Vol. 93, No. 8, pp. 82-91
Chloramines, which are chemicals caused by combining chlorine and ammonia (NH3)	Virginia Tech, study commissioned by WSSC, December 2004
Water velocity in undersized copper tubes. For tubing sizes normally installed in home plumbing, the design water velocity should be targeted toward 4 fps. The greatest effect of velocity occurs where the water is forced to change flow direction, such as at elbows and tees, but excessive water flow rates can be damaging to the entire plumbing system. When copper tubing is installed that is too small in diameter for the pressure and flow available, the resulting high flow rates can erode the protective coating creating areas of bare, unprotected copper. This effect can result in a high rate of corrosion wherever the protective coating is eroded.	A White Paper Review: History Of Use And Performance Of Copper Tube For Potable Water Service, Richard O. Lewis, P.E. Lewis Engineering and Consulting, Inc., http://www.wsscwater.com/ copperpipe/letters/copperpipewp.cfm

Sources of Suspect Pinhole Causes

The suspect causes for pinhole leaks come from different sources.

Element or Compound	Source
Aluminum & Silica	Cement main pipes; or Coagulant chemicals added during treatment
Solder flux	Poor workmanship
Water velocity	Improperly designed water distribution system

Factors that do not contribute to pinholes

Studies have shown that many factors that were thought to contribute to pinhole leaks in copper pipes have been proven otherwise or have little scientific basis. Some of these factors are:

Factor	Source
Manufacture of the copper plumbing materials	Final report on Maryland Task Force on Pinhole Leaks in Copper Pipes
Electrolysis	Symposium – Copper Plumbing Tube Pitting
Grounding of electrical systems/ phone systems to the piping system
Harmonic divergence (the alignment of the planets)
Solar flares/sun-spots
Cellular phone/radio signals
Cheap/inferior or imported copper

Repair Options

Currently, homeowners have several options from which to choose. However, none of the options address the root cause of the problem; they simply try to correct the symptoms. Most of the options are also costly. These options include:

• Fixing the leak by application of external solder
• Replacing a small or larger section of tube
• Re-plumbing the entire house (However, even a complete re-plumb with new copper tubing does not guarantee that the problem will not recur after a period of time.)
• Re-plumbing and replacing copper with PVC or CPVC
• Coat the inside of existing pipes with epoxy – see the Epoxy Pipe Lining Technology Inventory item
• Purchasing potential cures (of questionable value), such as magnets

Pinhole Leak Prevention

It is difficult to totally eliminate or prevent copper pitting. However, there are a few things you can do to reduce them, such as:

Examine accessible/exposed copper piping for small, bluish-green stains on the pipes – away from joints. This can be an indication of a pinhole leak. Call a licensed plumber immediately at the first signs of leaks. (Bluish-green stains on copper pipes do not necessarily indicate there is a pinhole leak – they can appear on copper pipes in a damp environment, such as the basement.)

Before purchasing a home, self inspect plumbing (or have a licensed plumber do so), ask about the plumbing history, and find out how long the house has been vacant, if applicable.

Purchase pipe clamps from any hardware store and install them over pinholes to stop leaks until repairs can be made.

Have your water tested for pH value. It may be necessary to do this a number of times at several day intervals, to catch variations. Your water pH should always be higher than 7. If it isn’t, talk to your water department.

Reference Materials

• Task Force Study – Final report on MD Task Force on pinhole leaks in copper pipes “Pinhole Leaks in Copper Plumbing.”
• http://www.msa.md.gov/msa/mdmanual/26excom/defunct/html/10copper.html
• Symposium – Copper Plumbing Tube Pitting
• www.copper.org/environment/NACE02122/nace02122c.html
• J.R. Meyers and A. Cohen, “Pitting Corrosion of Copper in Cold Potable Water Systems”, Materials Performance, 34 (10), October 1995
• “Corrosion of Copper in Potable Water Systems.” Internal Corrosion of Water Distribution Systems, 2nd Edition. AWWA Research Foundation and DVGW-Technologiezentrum Wasser, 1996.
• VA Tech research: Rushing and Edwards, 2004, and Marshall, 2004.

BUILDER TECHNOTEFigure 1 Pipe with Pinhole Leak (Courtesy of WSSC)
Internal pitting corrosion of copper pipes is a rare but costly problem that leads to the formation of pinhole leaks. Although the factors that cause this problem are mostly unknown, it is well recognized that the chemistry of the water traveling through the pipes can influence the formation and propagation of pits.
Pinhole leaks are a major concern to homeowners as they may:
• be costly, given the effort required to find and repair each leak
• result in highly variable amounts of water damage per occurrence
• lead to loss of water resources from undetected leaks in service laterals
• lead to growth of mold and mildew
• result in higher premiums for or cancellation of homeowner insurance
There is also a legitimate concern for consumers that one leak might soon follow another. Insurance companies often raise premiums or simply do not renew policies, and homeowners distraught over leaks can reach the point they do not feel comfortable leaving the house without first turning off the water.
What is a Pinhole Leak?
A pinhole leak is a final breakthrough event of the progressive attack of pitting corrosion on copper water plumbing. A copper water plumbing system can be in a condition of having significant damage by pitting corrosion, but not have pinhole leaks. The challenge is how to discover pitting corrosion before pinhole leaks develop. Figures 1 and 2 show a pinhole leak in a copper pipe.
The State of Maryland Task Force to Study Pinhole Leaks in Copper Plumbing defines a copper pinhole leak as “the perforation of copper tube, pipe or fittings used for domestic water distribution as the result of pitting corrosion initiated on the interior/waterside surface with the subsequent leakage of water.“
How Many Homes are Affected?
There is no comprehensive source of information on the occurrence of pinhole leaks. Many utilities and water authorities have collected thousands of reports, submitted voluntarily by residents who have experienced pinhole leaks. Often, homeowners consider pinhole leaks as a plumbing problem, and do not report them to their water utility.
Copper Pinhole Leaks
Where Do Pinhole Leaks Happen Most Often?
Although pinhole leaks could happen in any copper pipe or tube within a house, the Washington Suburban Sanitary Commission (WSSC) reported that the majority of pinhole leaks that their customers had reported were in cold-water, horizontal copper piping. Most of the leaks were in older homes, and 80 percent of the reports involved homes built prior to 1970. Figure 2 Pipe with Pinhole Leak (Courtesy of WSSC)
What is Copper Piping and Why is it Used?
Copper piping has been used for domestic water supply for over 50 years. Since 1963, over 5.3 million miles of copper plumbing tube has been installed in about 80 percent of all U.S. buildings. Copper is the most widely used material for plumbing systems because of its ease of use, resistance to corrosion, and resistance to permeation by liquids and gases, which may be sources of corrosion and contamination.
Copper tubing used for domestic water supply and distribution is manufactured to meet specification B88, Standard Specification for Seamless Copper Water Tube, established by the American Society for Testing and Materials (ASTM). According to the Copper Development Association Inc.’s Copper Tube Handbook:
“All tube supplied to these ASTM standards is a minimum of 99.9 percent pure copper and silver combined. The copper customarily used for tube supplied to these specifications is deoxidized with phosphorus and referred to as C12200 (Copper No. 122) or DHP Copper. Other coppers may also be used.”
In addition to copper, there is a maximum of 0.04 percent phosphorus in copper tubing. The techniques for manufacturing copper piping are the same now as they have been for decades.
Copper (Pitting) Corrosion
There are many forms of corrosion, but pitting corrosion is most likely to culminate in pinhole leaks in copper plumbing. Pitting corrosion is the non-uniform localized attack of the wall of copper tube, pipe, or fittings initiated on the interior/waterside surface in the domestic water distribution system, in which only small areas of the metal surface are attacked, while the remainder is largely unaffected. Pitting corrosion starts on metal surfaces for unknown reasons, and some combinations of water chemistry factors allow the process to continue while some do not. Pitting corrosion can be classified into three types:
Type I pitting is associated with hard or moderately hard waters with a pH between 7 and 7.8, and it is most likely to occur in cold water. The pitting is deep and narrow, and results in pipe failure.
Type II pitting occurs only in certain soft waters, with a pH below 7.2 and occurs rarely in temperatures below 140º F. The pitting that occurs is narrower than in Type I, but still results in pipe failure.
Type III pitting occurs in cold soft waters having a pH above 8.0. It is a more generalized form of pitting, which tends to be wide and shallow and results in blue water, byproduct releases, or pipe blockage.
2
Copper Pinhole Leaks
What Causes Pinholes?
Several studies and research projects have been conducted to determine the possible cause of pinhole leaks in copper pipes, but no definitive causes have been established. Some blame it on the chemicals in the water, while others blame it on workmanship and temperature gradients. The list below illustrates the different variables that are thought to cause pinhole leaks. These variables demonstrate the complexity of trying to pinpoint the suspected causes..
Possible Causes
Study or Research
Combination of high pH, low organic matter, aluminum solids, and free chlorine
Virginia Tech, study commissioned by WSSC, December 2004
Aggressive water, poor workmanship, and addition of water softeners
University of Florida School of Building Construction (1997)
Workmanship: Excessive use of fluxes; fluxes are corrosive by their nature
AWWA Research Foundation and DVGW-Technologiezentrum Wasser, 1996
Aluminum-bearing compounds (from concrete pipes, cement mortar lining of cast iron pipes, aluminum coagulant carryover from treatment plants)
Final report on Maryland Task Force on Pinhole Leaks in Copper Pipes
Combination of: use of soft waters with low pH; high suspended solids and assimilable organic carbon content; long-term or periodic water stagnation; low or nonexistent chlorine levels; maintenance of water temperatures that promote rapid growth and activity of naturally occurring bacteria; and/or the lack of an adequate monitoring program to periodically evaluate water quality and pipe wall condition
Journal AWWA , August 2001, Vol. 93, No. 8, pp. 82–91
Chloramines, which are chemicals caused by combining chlorine and ammonia (NH3)
Virginia Tech, study commissioned by WSSC, December 2004
Water velocity in undersized copper tubes. For tubing sizes normally installed in home plumbing, the design water velocity should be targeted toward 4 fps. The greatest effect of velocity occurs where the water is forced to change flow direction, such as at elbows and tees, but excessive water flow rates can be damaging to the entire plumbing system. When copper tubing is installed that is too small in diameter for the pressure and flow available, the resulting high flow rates can erode the protective coating creating areas of bare, unprotected copper. This effect can result in a high rate of corrosion wherever the protective coating is eroded.
A White Paper Review: History Of Use And Performance Of Copper Tube For Potable Water Service, Richard O. Lewis, P.E. Lewis Engineering and Consulting, Inc., www.wssc.dst.md.us/service/copperpipe.html
3
Copper Pinhole Leaks
Sources of Suspect Pinhole Causes
The suspect causes for pinhole leaks come from different sources.
Element or Compound
Source
Aluminum & Silica
Cement main pipes; or
Coagulant chemicals added during treatment
Solder flux
Poor workmanship
Water velocity
Improperly designed water distribution system
Factors that do not contribute to pinholes
Studies have shown that many factors that were thought to contribute to pinhole leaks in copper pipes have been proven otherwise or have little scientific basis. Some of these factors are:
Factor
Source
Manufacture of the copper plumbing materials
Final report on Maryland Task Force on Pinhole Leaks in Copper Pipes
Electrolysis
Grounding of electrical systems/ phone systems to the piping system
Harmonic divergence (the alignment of the planets)
Solar flares/sun-spots
Cellular phone/radio signals
Cheap/inferior or imported copper
Symposium – Copper Plumbing Tube Pitting
Repair Options
Currently, homeowners have several options from which to choose. However, none of the options address the root cause of the problem; they simply try to correct the symptoms. Most of the options are also costly. These options include:
• Fixing the leak by application of external solder
• Replacing a small or larger section of tube
• Re-plumbing the entire house (However, even a complete re-plumb with new copper tubing does not guarantee that the problem will not recur after a period of time.)
• Re-plumbing and replacing copper with PVC or CPVC
• Coat the inside of existing pipes with epoxy – see the Epoxy Pipe Lining Technology Inventory item
• Purchasing potential cures (of questionable value), such as magnets
Pinhole Leak Prevention
It is difficult to totally eliminate or prevent copper pitting. However, there are a few things you can do to reduce them, such as:
Examine accessible/exposed copper piping for small, bluish-green stains on the pipes – away from joints. This can be an indication of a pinhole leak. Call a licensed plumber immediately at the first signs of leaks. (Bluish-green stains on copper pipes do not necessarily indicate there is a pinhole leak – they can appear on copper pipes in a damp environment, such as the basement.)
Before purchasing a home, self inspect plumbing (or have a licensed plumber do so), ask about the plumbing history, and
4
Copper Pinhole Leaks
find out how long the house has been vacant, if applicable.
Purchase pipe clamps from any hardware store and install them over pinholes to stop leaks until repairs can be made.
Have your water tested for pH value. It may be necessary to do this a number of times at several day intervals, to catch variations. Your water pH should always be higher than 7. If it isn’t, talk to your water department.
Reference Materials
• Task Force Study – Final report on MD Task Force on pinhole leaks in copper pipes “Pinhole Leaks in Copper Plumbing.”
• www.mdarchives.state.md.us/msa/mdmanual/26excom/defunct/html/10copper.html
• Symposium – Copper Plumbing Tube Pitting
• www.copper.org/environment/NACE02122/nace02122c.html
• J.R. Meyers and A. Cohen, “Pitting Corrosion of Copper in Cold Potable Water Systems”, Materials Performance, 34 (10), October 1995
• “Corrosion of Copper in Potable Water Systems.” Internal Corrosion of Water Distribution Systems, 2nd Edition. AWWA Research Foundation and DVGW-Technologiezentrum Wasser, 1996.
• VA Tech research: Rushing and Edwards, 2004, and Marshall, 2004.

FREE ESTIMATES

Jacksonville       Duval County                 904-346-1266
St Augustine      St Johns County             904-824-7144
Orange Park       Clay County                   904-264-6444
Jacksonville Beaches    Duval County      904-246-3969
Fernandina          Nassau County               904-277-3040
Macclenny          Baker County                 904-259-5091
Palm Coast         Flagler County                386-439-5290
Daytona              Volusia County               386-253-4911

GAINESVILLE    ALACHUA COUNTY       352-335-8555
Serving all of Florida  and Georgia    at     904-346-1266

EMAIL LARRY@1STPROP.COM (feel free to email your bidding packages here)

TASK FORCE TO STUDY PINHOLE LEAKS IN COPPER PLUMBING

George C. Eaton III, Chair (chosen by Governor)

Appointed by Governor: George R. Cranford, Jr.; Chris A. Johnson; Nicole M. Maddrey, Esq.; Patrick J. Moran, Ph.D.; Dale L. Powell; Ruel L. Smith.

Representing Maryland Association of Counties: David Lake; Palvi Spoon.

Appointed by Chancellor, University System of Maryland: Charles W. Carr

Ex officio: Kendl P. Philbrick, Secretary of the Environment; George C. Eaton III, designee of Secretary of Housing & Community Development; Jinhee Kim Wilde, Chair, Washington Suburban Sanitary Commission; Alfred W. Redmer, Jr., Maryland Insurance Commissioner.

Representing U.S. Environmental Protection Agency: not yet named

Contact: Jean Peterson

c/o Division of Credit Assurance, Dept. of Housing & Community Development
100 Community Place, Crownsville, MD 21032 – 2023
(410) 514-7358
e-mail: peterson@dhcd.state.md.us
web: www.wsscwater.com/cfdocs/copperpipe/pinholescroll.cfm

• Final Report, December 2004

In June 2003, the Task Force to Study Pinhole Leaks in Copper Plumbing was authorized (Chapter 476, Acts of 2003). The Task Force researched the extent, patterns, and trends of pinhole leakage in Maryland; investigated causes of pinhole leaks in copper plumbing; determined what effect pinhole leaks have on homeowner insurance coverage; and made recommendations to solve the problem of pinhole leaks.

In December 2004, the Task Force reported to the General Assembly. Authorization for the Task Force ended January 31, 2005.

Maryland Constitutional Offices & Agencies
Maryland Departments
Maryland Independent Agencies
Maryland Executive Commissions, Committees, Task Forces, & Advisory Boards
Maryland Universities & Colleges
Maryland Counties
Maryland Municipalities
Maryland at a Glance

FINAL REPORT
Robert L. Ehrlich, Jr.
Governor
Michael S. Steele
Lt. Governor
Victor L. Hoskins
Secretary
Shawn S. Karimian
Deputy Secretary
Task Force Study

State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
Executive Summary
The Task Force to Study Pinhole Leaks in Copper Plumbing was established under the auspices of Senate Bill 54, 2003, in order to help Marylanders understand the pinhole leak phenomenon, and thus deal with its consequences. Pinhole leaks pose problems for several reasons:
• They may cause water damage to plaster and sheetrock walls, electrical systems, flooring, ceilings or furniture;
• Undetected water leakage may result in mold growth;
• Repairing or replacing copper pipe, because of limited access, is generally costly;
• Water damage claims may result in homeowners’ insurance premiums being raised, or non-renewal of policies.
Possible causes to the pinhole leak problem are offered in this report, although it is widely believed that there is no one cause; and there is no one solution. Rather, it is generally held that a number of circumstances may contribute to the problem, and a variety of remedies may be available for consideration.
In order to answer the charge set forth in Senate Bill 54, the Task Force established three subcommittees:
• Water Treatment and Quality, which dealt with water chemistry, water treatment practices, and water additives;
• Materials and Installation, which studied copper plumbing design, manufacturing and installation practices, and also researched other materials used in plumbing systems;
• Insurance, which investigated the effect of pinhole leak incidents on homeowners’ insurance coverage.
This report examines the extent of the problem in major water suppliers’ areas of the state and discusses the physical elements of the pinhole leak problem, including public water suppliers, sources of water, the water treatment process, copper piping, corrosion, and the effects of corrosion on copper pipe. The report then moves to regulatory issues, with emphasis on rules set forth by the U.S. Environmental Protection Agency, and the effects of those rules on water conditions. The Safe Drinking Water Act protects the public health by regulating the nation’s public drinking water supplies. The Lead and Copper Rule protects the public by minimizing lead and copper levels in drinking water; and the Stage 1 Disinfectants and Disinfection Byproducts (D/DBP) Rule reduces health risks by regulating the allowable concentration of disinfection byproducts in the drinking water. This D/DBP Rule has been successful, for example, in reducing the overall risk of cancer. Unfortunately, the water treatment processes that reduce the concentration of disinfection byproducts may increase the incidence of corrosion in copper pipe and other piping materials based on recent water research.
i December 2004
State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
In the section on Insurance, the report examines underwriting, since insurers have always used loss histories as a tool for rating eligibility of the prospective policy holder for coverage. This section describes the Comprehensive Loss Underwriting Exchange (CLUE) and A-Plus Reports and explains the effects of pinhole leaks on insurance coverage, including what options the consumer may consider when advised by their insurer that their policy may be cancelled or their premiums may increase. The options for consumers whose policies have been cancelled in the normal insurance market are explored as well.
Finally, the Task Force offers in this report a list of recommendations, sorted by category, for the reader’s convenience. It should be emphasized that these are recommendations only and are the result of the group’s study of the problem – by researching available written research, by interviewing various guests who appeared before the Task Force (expert scientific presentations by Dr. Marc Edwards of the Virginia Polytechnic Institute and State University (Virginia Tech) and Bob Buglass of Washington Suburban Sanitary Commission (WSSC), and others) as well as information gleaned from a poll of Maryland water suppliers.
The Task Force advises that, although specific causes have yet to be finitely determined, much research is underway; and options for prevention, as well as for mitigation of this problem, are available. Although the Task Force has now completed its charge, it is hoped that the water suppliers and the copper industry will sponsor further research and support these beginning efforts to solve the pinhole leak problem.
George C. Eaton, Chairman, Designee
Task Force to Study Pinhole Leaks in Copper Plumbing
December 2004
ii December 2004
State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
Table of Contents
Executive Summary………………………………………………………………………………………………….i
Table of Contents……………………………………………………………………………………………………iii
List of Figures and Tables……………………………………………………………………………………….vi
Disclaimer……………………………………………………………………………………………………………vii
I Introduction…………………………………………………………………………………………………….1
A. The Problem of Pinhole Leaks……………………………………………………………………………….1
B. Senate Bill 54………………………………………………………………………………………………………1
Definition Used by the Task Force………………………………………………………………………………1
C. The Task Force…………………………………………………………………………………………………….3
Organization……………………………………………………………………………………………………………3
Methodology…………………………………………………………………………………………………………..4
II. Background………………………………………………………………………………………………….4
A. Communities Affected and Timeframe……………………………………………………………………4
B. Extent of Known Pinhole Leaks in Maryland…………………………………………………………..5
Prince George’s and Montgomery Counties…………………………………………………………………5
Anne Arundel County……………………………………………………………………………………………….8
Baltimore City and County…………………………………………………………………………………………9
Carroll County………………………………………………………………………………………………………..10
Frederick County…………………………………………………………………………………………………….10
Individual Water Sources…………………………………………………………………………………………10
Outside Maryland……………………………………………………………………………………………………10
C. Insurance Issues…………………………………………………………………………………………10
1. Insurance Underwriting and Rating……………………………………………………………………….10
Comprehensive Loss Underwriting Exchange (CLUE) and A-PLUS Reports…………………11
2. Effects of Pinhole Leaks on Homeowners’ Insurance………………………………………………11
Policy Limitations and Eligibility for Insurance………………………………………………………….11
Distinguishing Types of Damage………………………………………………………………………………12
Non-Renewal or Cancellation of a Policy…………………………………………………………………..12
Obtaining Insurance Coverage when Adverse Action Occurs……………………………………….12
III. The Physical Elements of the Problem………………………………………………………….13
A. Water………………………………………………………………………………………………………..13
iii December 2004
State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
Public Water Suppliers…………………………………………………………………………………………….13
Sources of Water…………………………………………………………………………………………………….13
Impurities in Water………………………………………………………………………………………………….14
B. Water Treatment Process……………………………………………………………………………………..14
Surface Water…………………………………………………………………………………………………………14
Coagulation and Flocculation……………………………………………………………………………………15
Sedimentation………………………………………………………………………………………………………..15
Filtration……………………………………………………………………………………………………………….16
Disinfection…………………………………………………………………………………………………………..16
pH Adjustment………………………………………………………………………………………………………16
Corrosion Control……………………………………………………………………………………………………16
Groundwater Treatment……………………………………………………………………………………………17
C. Copper Piping (Tubing)……………………………………………………………………………………….17
Other Piping………………………………………………………………………………………………………….18
D. Corrosion………………………………………………………………………………………………………….18
Copper Corrosion……………………………………………………………………………………………………18
Pitting Corrosion…………………………………………………………………………………………………….18
E. Effects of Pitting Corrosion………………………………………………………………………………….19
IV. Regulatory Issues……………………………………………………………………………………….19
A. Safe Drinking Water Act……………………………………………………………………………………..19
B. Lead and Copper Rule…………………………………………………………………………………………19
C. Disinfectants and Disinfection Byproducts Rule…………………………………………………….20
D. Interim Enhanced and Long Term 1 Enhanced Surface Water Treatment Rule…………..20
V. Possible Causes of Pinhole Leaks…………………………………………………………………20
A. Research Related to the WSSC Water System………………………………………………………..21
B. Other Reports…………………………………………………………………………………………………….25
C. Copper Plumbing Materials………………………………………………………………………………….26
D. Installation and Workmanship………………………………………………………………………………26
E. Design Issues……………………………………………………………………………………………………..26
F. Reduced Natural Organic Matter (NOM)……………………………………………………………….26
G. Other Chemicals in Water……………………………………………………………………………………27
H. Exterior Factors………………………………………………………………………………………………….27
iv December 2004
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Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
VI. Recommendations………………………………………………………………………………………28
A. Home Purchaser’s Role (When considering the purchase of a home)………………………..28
B. Home Owners with Pinhole Leaks Problems ………………………………………………………..28
C. Home Inspectors…………………………………………………………………………………………………29
D. Water Suppliers …………………………………………………………………………………………………29
E. Plumbers and Home Improvement Contractors ……………………………………………………..30
F. Training and Information…………………………………………………………………………………….31
Conclusion…………………………………………………………………………………………………………..32
APPENDIX A: FACT SHEET………………………………………………………………………………….34
APPENDIX B: SENATE BILL 54…………………………………………………………………………….36
APPENDIX C: AREAS REPORTING LOW INCIDENCE OF PINHOLE LEAKS…………..38
APPENDIX D: SOURCES……………………………………………………………………………………….41
APPENDIX E: ABBREVIATIONS AND GLOSSARY…………………………………………………47
APPENDIX F: USEFUL WEB SITES AND PHONE NUMBERS…………………………………49
APPENDIX G: MARYLAND RESIDENTIAL PROPERTY DISCLOSURE AND DISCLAIMER STATEMENT…………………………………………………………………………………..50
v December 2004
State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
List of Figures and Tables
Figure 1: Pipe with Pinhole Leak (Courtesy of WSSC)…………………………………………………………2
Figure 2: Shows Further Details of Pinhole Leak (Courtesy of WSSC)…………………………………..3
Figure 3: Pinhole Leaks by Community in WSSC Area, June 2004………………………………………..5
Figure 4: Pinhole Leaks by ZIP Code in WSSC Area, June 2004…………………………………………..6
Figure 5: Pinhole Leaks per 1,000 Customers by Decade of Construction in WSSC Area, June 2004………………………………………………………………………………………………………………………………7
Figure 6: Pinhole Leaks by Pipe Orientation in WSSC Area, June 2004………………………………….8
Figure 7: Baltimore County Water Sources (Courtesy of Baltimore DPW)……………………………..9
Figure 8: Typical Surface Water Treatment (Courtesy of WSSC)…………………………………………15
Figure 9: Pipe from Arlington, Virginia Water System with Clamps to Stop Pinhole Leaks (Courtesy Dr. Marc Edwards)………………………………………………………………………………………….22
Figure 10: Dried Copper Surfaces After 6 months’ Exposure to WSSC Water and Aluminum Solids…………………………………………………………………………………………………………………………..24
Figure 11: Copper Pipe Samples at the End of the Experiment…………………………………………….25
Table 1: Other Counties of Maryland………………………………………………………………………………..40
vi December 2004
State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
Disclaimer
The report of this Task Force does not invoke any legal or regulatory authority of the State of Maryland, nor does it assign any legal culpability to any party mentioned in this report. Any information contained in this report should not be construed as legal or regulatory advice on any subject matter. No reader of this report should act or refrain from acting on the basis of any content included in, or accessible through, the report, without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from professionals licensed in the recipient’s state, country or other appropriate licensing jurisdiction.
The Task Force has made reasonable efforts to ensure that all information provided through this report is accurate at the time of inclusion. However, there may be inadvertent and occasional errors. It should not be taken as a definitive guide to every area of concern, nor should it be considered sufficiently full and accurate to cover every situation.
Mention of trade names or commercial products does not constitute endorsement or recommendation for use.
vii December 2004
State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
I Introduction
A. The Problem of Pinhole Leaks
Pinhole leaks pose a problem to property owners for several reasons. They may cause water damage to walls, electrical systems, flooring, ceilings, or furniture. Undetected water caused by pinhole leaks may result in mold growth. Repairing or replacing pipe may be costly. Finally, water damage claims might result in homeowners’ insurance premiums being raised or insurance companies not renewing homeowners’ policies.
B. Senate Bill 54
The recent concerns about pinhole leaks in copper plumbing prompted the State of Maryland to establish a task force to examine the phenomenon and recommend possible solutions. This document summarizes the efforts of the Task Force in fulfilling Senate Bill 54.
The Bill states in part:
“(f) The Task Force shall:
(1) determine the extent, patterns, and trends of pinhole leaks in Maryland;
(2) investigate the possible causes of pinhole leaks in copper plumbing, including: water chemistry requirements adopted by the EPA; water treatment practices; water additives; copper plumbing design, manufacturing, and installation practices; and copper plumbing cleaning and lining practices;
(3) investigate the effect of pinhole leaks in copper plumbing on homeowners’ insurance coverage; and
(4) make recommendations regarding possible remedies for pinhole leaks in copper plumbing and possible steps for Maryland residents to take if they experience a problem with pinhole leaks.
(g) The Task Force shall report its findings and recommendations to the General Assembly on or before December 31, 2004.”
Because of the Task Force’s mandate, this report covers pinhole leaks in water pipes made of copper, and their effects and not other types of problems that plumbers, homeowners, and insurers have encountered.
The primary focus of the report is on public water supply systems. Much of the State of Maryland is served by wells. There are risks to copper pipes from untreated well water, but this issue was not the basis for concerns that led to the formation of this Task Force.
The recommendations of this report are aimed at homeowners, water industry, plumbing industry, insurance industry, and state regulatory agencies.
Definition Used by the Task Force
The Task Force defines a Copper Pinho1e Leak as the perforation of copper tube, pipe or fittings used for domestic water distribution as the result of pitting corrosion initiated on the interior/waterside surface with the subsequent leakage of water. Pinhole leaks in the sense of this report are limited to water supply systems employing copper piping. It does not cover leaks in drainage, waste, venting, comfort heating or cooling systems, or gas supply pipes.
Any other leaks reported are not pinhole leaks and have different causes.
1 December 2004
State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
A pinhole leak is a final breakthrough event of the progressive attack of pitting corrosion on copper water plumbing. A copper water plumbing system can be in a condition of having significant damage by pitting corrosion, but not have pinhole leaks. The challenge is how to discover pitting corrosion before pinhole leaks develop. Discovery of such latent damage would require removal and inspection of the internal surfaces of sample plumbing in the system.
Figure 1 shows a pinhole leak in a pipe that was sent to the Washington Suburban Sanitary Commission (WSSC).
Figure 1: Pipe with Pinhole Leak (Courtesy of WSSC)
2 December 2004
State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
Figure 2: Shows Further Details of Pinhole Leak (Courtesy of WSSC)
C. The Task Force
Organization
The Maryland Department of Housing and Community Development, which is a Cabinet-level state agency, was given the responsibility to organize the Task Force, to host meetings, and to provide staffing support for the Task Force.
The Task Force was organized into three subcommittees:
1. Water Treatment and Quality Subcommittee, which dealt with water chemistry requirements adopted by the U.S. Environmental Protection Agency (EPA); water treatment practices; and water additives
2. Materials and Installation Subcommittee, which investigated copper plumbing design, manufacturing, and installation practices and copper plumbing cleaning and lining practices, as well as other materials such as plastic, epoxy, and other metals used in plumbing; and the
3. Insurance Subcommittee, which investigated the effect of pinhole leaks in copper plumbing on homeowners’ insurance coverage.
3 December 2004
State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
Methodology
The Task Force followed this general methodology to fulfill the mandate of Senate Bill 54: investigating known cases of pinhole leaks and the frequency and possible causes of pinhole leaks, including a survey of public water suppliers in the state, as well as interviewing industry professionals and surveying literature; by determining possible causes for pinhole leaks; and by recommending possible steps for Marylanders, water suppliers, plumbing industry and insurance industry to take if they experience problems with pinhole leaks. These included recommendations on how to remediate current problems, what preventative measures could be taken, and how the State of Maryland can help. Finally, the Task Force concluded its mandate by issuing this report.
Early drafts of this report were distributed for comment among members of the Task Force and outside experts, including the U.S. Environmental Protection Agency. The Task Force wishes to thank those who took time to comment upon and, therefore, improve the report.
II. Background
A. Communities Affected and Timeframe
There is no comprehensive source of information on the occurrence of pinhole leaks. Washington Suburban Sanitary Commission (WSSC) has collected thousands of reports—although these reports are submitted voluntarily by residents who have pinhole leaks. This reporting increased after there were several media reports on pinhole leaks. Anecdotal information suggests that numerous homeowners consider pinhole leaks as a plumbing problem, and do not report them to their water utility. Plumbers in the metropolitan Washington area had also reported a rise in pinhole leak incidents. The WSSC started adding orthophosphates to water supplies on November 12, 2003. Plumbers in the WSSC service area have reported reductions in pinhole leaks since the introduction of orthophosphates. In a survey of the water utilities in Maryland undertaken by this Task Force, pinhole leaks in copper plumbing have been found to be concentrated in portions of Prince George’s, Montgomery, and Carroll Counties.
One insurance company reports that the majority of pinhole leak claims come from Prince George’s and Montgomery Counties. In addition, Carroll County has reported occurrences of pinhole leaks.
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4 December 2004
State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
B. Extent of Known Pinhole Leaks in Maryland
The Task Force conducted a survey, and used information gathered by the Washington Suburban Sanitary Commission (WSSC). The data from Maryland counties with known pinhole leaks is presented below. Other counties are listed in Appendix C.
Prince George’s and Montgomery Counties
WSSC services a large portion of Prince George’s and Montgomery Counties using surface water sources. WSSC is among the ten largest water and wastewater utilities in the nation, serving 1.6 million customers in Prince George’s and Montgomery counties. The WSSC system consists of more than 5,000 miles of pipeline and 63 water storage facilities. According to the WSSC, through June 2004 approximately 5,400 customers out of about 417,000 accounts reported pinhole leaks.
WSSC maintains a Web site on which their customers can report pinhole leaks. (http://www.wsscwater.com/cfdocs/copperpipe/pinholescroll.cfm) This enables the WSSC to obtain the information without the cost or intrusion of surveys, but the data is limited to self-selecting households. Most reports come from older communities in southern Montgomery County such as Silver Spring and Bethesda, and northern Prince George’s County such as Laurel and Beltsville, as shown in Figure 3:
Figure 3: Pinhole Leaks by Community in WSSC Area, June 2004
5 December 2004
State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
Further breakdown by ZIP code, as shown in Figure 4, shows pinhole leaks are most widely reported in Montgomery County (ZIP codes starting with 208; Silver Spring ZIP codes start with 209) and Beltsville and Laurel in Prince George’s County. ZIP codes of 20720 and 20723, are in Howard County.
Figure 4: Pinhole Leaks by ZIP Code in WSSC Area, June 2004
(Data is not normalized to number of customers)
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
The data presented in Figures 3 and 4 has not been normalized to frequency of complaints per 1,000 water service connections or billing customers. There may be more complaint reports in Silver Spring and Bethesda simply because there may be more customer connections in these communities. Furthermore, because these reports are self-selected, they may not reflect a true distribution of the problem. WSSC has normalized the collected data by the age of the house as shown in Figure 5*. The data shows that over 300 of every 1,000 houses built from 1930 – 1939 have reported leaks; about 75 of 1,000 houses built from 1940 – 1949 have reported leaks, approximately 40 per 1,000 in the decade 1950 to 1959, and fewer than 20 per 1,000 in subsequent decades.
Figure 5: Pinhole Leaks per 1,000 Customers by Decade of Construction in WSSC Area, June 2004
*Definition of normalized is leak rate per 1,000 houses in each age group
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7 December 2004
State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
The WSSC reports that the majority of pinhole leaks that customers have reported are in cold water, horizontal copper piping, as shown in Figure 6. Most of the leaks are in the older areas of Montgomery and Prince George’s Counties. Nearly 80% of the reports involve homes built prior to 1970.
Figure 6: Pinhole Leaks by Pipe Orientation in WSSC Area, June 2004
Anne Arundel County
95% of all fresh water withdrawals in Anne Arundel County are from ground water sources. The Anne Arundel County Department of Public Works (DPW) Bureau of Utility of Operations uses groundwater supplies through 8 independent wells and 13 major water treatment plants, which obtain their water from 57 production wells. The county system is supplemented in the northern portion of the county by three connections to the City of Baltimore, from which the County purchases treated water. However, the Task Force received testimony from residents of Anne Arundel County who have experienced pinhole leaks.
As of the time of writing this report, there have not been any reported issues of increased occurrence or widespread distribution of pinhole leaks by the Annapolis DPW. Annapolis’ public water supply is provided by a City-owned and operated treatment plant and distribution system. The U.S. Naval Academy has its own water system while the remainder of the Annapolis Peninsula is served by Anne Arundel County. The City’s treatment plant handles groundwater extracted by wells from the Patapsco Aquifer. The plant’s capacity was upgraded to 10 million gallons per day (MGD) from 6 million MGD in 1987. There are a number of other public water systems throughout Anne Arundel County that also utilize groundwater sources.
8 December 2004
State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
Baltimore City and County
The Baltimore City Bureau of Water and Wastewater, a Division of the Department of Public Works, provides water service to the City of Baltimore, 600,000 residents in Baltimore County, the eastern portion of Howard County, and the northern portions of Anne Arundel County. The sources of water, as shown in Figure 7 are the Liberty Reservoir, which is fed by the Patapsco River, the Loch Raven Reservoir, and the Susquehanna River.
Figure 7: Baltimore County Water Sources (Courtesy of Baltimore DPW).
96% of all fresh water withdrawals in Baltimore County and City are from surface water sources. There are three treatment plants: Ashburton and two Montebello plants. Alum is used as a coagulant and sodium hypochlorite as a disinfectant. As of the time of writing this report, there have not been any reported issues or widespread distribution of pinhole leaks. However, the Task Force received testimony from residents of Baltimore City who have experienced pinhole leaks.
9 December 2004
State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
Carroll County
Groundwater is the principal source of both public and private potable water supplies in Carroll County. Approximately 72% of the County’s population receives their water supply from wells (groundwater) only. With the exception of Westminster and the Sykesville- Freedom District, all the public water suppliers in Carroll County rely solely on groundwater from the aquifers in the County. The public water service areas provide an average daily volume of approximately 6.58 MGD of water to their service areas (including Westminster and Sykesville-Freedom), serving approximately 42% of the County’s population. The Carroll County Master Plan for Water and Sewerage (http://www.carr.org/ccg/plan-d/w-splan/maps.htm) shows the ten Water Service Areas for the County. (Carroll County Master Plan)
Additionally, the Task Force received testimony and written documentation from residents of Carroll County who have experienced pinhole leaks.
Frederick County
Almost 79% of the County’s water system customers receive treated water from surface water supplies, specifically the Potomac River and Lake Linganore. The remaining 21% of Fredrick County customers receive treated ground water from deep well sources.
Frederick County has established a telephone contact for users to report pinhole leaks: 301-631-3450, Monday through Friday from 7:00 a.m. to 3:30 p.m. (Frederick County)
Individual Water Sources
Individual water sources in Maryland are usually wells withdrawing water from groundwater supplies. Property owners that obtain their potable water from on-site private sources (wells, springs or lakes) and not municipal sources are personally responsible for the quality of their own potable water. These systems were not evaluated by the Task Force.
Outside Maryland
Research, motivated by failure of copper plumbing in service, has been undertaken through the years, beginning as early as the 1960s.
A nationwide telephone survey of plumbers conducted, on behalf of the WSSC, reported that plumbers throughout the United States were reporting an increase in pinhole leak activity. (Edwards, Rushing et al, 2001)
Dr. Marc Edwards of the Virginia Polytechnic Institute and State University (Virginia Tech) believes and has testified during hearings of the U.S. House of Representatives and at City Council Hearings of the District of Columbia government that pinhole leaks in copper tubing are a major national problem.
C. Insurance Issues
1. Insurance Underwriting and Rating
Insurers use loss histories as a primary underwriting and rating factor for homeowners’ insurance policies. Insurers considering an application to write a new policy on an existing home obtain property loss histories in various ways. In addition to requesting information from the applicant, an insurance company may request a CLUE report.
10 December 2004
State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
Comprehensive Loss Underwriting Exchange (CLUE) and A-PLUS Reports
ChoicePoint, Inc., of Alpharetta, Georgia, provides underwriting tools to the insurance industry, which include resident information and fire loss history. Their Comprehensive Loss Underwriting Exchange (CLUE) database enables insurance companies to access consumer claims information when they are underwriting or rating an insurance policy. A CLUE report shows the history of losses for a specific property and property owner.
More than 600 or over 90% of the insurance companies in the United States report data to CLUE. There are approximately 47 million claims in CLUE. However, not all companies participate in CLUE, and insurers can withdraw their data from CLUE.
The source of the data is claim information provided by the insurance companies. It includes policy information, claim information such as the date of loss, type of loss, and the amounts paid, and the description of the property covered. This is the only data stored in CLUE. Insurers may not add information to the database.
Under the Federal Fair Credit Reporting Act, only the owner or insurer of the property can access CLUE reports. Policyholders can access only a report on themselves and their property. A prospective homeowner cannot access the CLUE report until he or she receives title to the property, unless it’s provided by the seller. A policyholder can request a copy of the CLUE report either once every 12 months, or when he or she receives a cancellation or non-renewal notice.
CLUE reports are used almost without exception for new policies. Most insurers do not access CLUE at renewal, but rely on their own data.
CLUE does not track pinhole leaks specifically. The closest type of data would be reporting on pipe bursts (“frozen pipes”) or water loss. One insurer is beginning to sort its own loss data to determine which water losses specifically come from pinhole leaks in copper plumbing.
One of the biggest issues with CLUE, and beyond CLUE to insurance policies is whether inquiries about an actual loss are counted as claims. Claim information in CLUE should be reported where there is a request from an insurer or claimant for payment because of a loss. In most cases, general questions about coverage are not recorded in the database. However, if a policyholder reports damage, even if ultimately no payment is made, the insurer is obligated to open a claim file, which would show up in the database. (CLUE; Wisconsin OCI)
A similar report is A-PLUS (Automated Property Loss Underwriting System), which is produced by the ISO Company of Jersey City, New Jersey.
Most insurance companies report claims to both CLUE and A-PLUS.
Both A-PLUS and CLUE comply with the Fair Credit Reporting Act. That law protects the consumer regarding the use of his or her credit information, including claims histories. Because of the nature of CLUE and A-PLUS, it cannot be used as a marketing or research database to determine the distribution of specific types of problems. (CLUE, A-PLUS)
2. Effects of Pinhole Leaks on Homeowners’ Insurance
Policy Limitations and Eligibility for Insurance
Insurance policies typically cover the water damage resulting from a pinhole leak to the extent they cover water damage generally. They do not cover replacement of the affected pipe as they consider this to be a home maintenance issue.
11 December 2004
State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
Without more refined claims information, there is no way to determine the full impact of pinhole leaks on homeowners’ insurance coverage. Each insurer has its own underwriting and rating criteria used to determine if a homeowner is eligible for coverage generally. In some companies, a home with two water damage claims might be placed in a high-risk pricing tier, or be denied insurance renewal. For the homeowner, this means higher premiums, or going to the unregulated insurance market to obtain a policy. The location of a home in an area with a number of water-damage claims may also lead to an increased premium or non-renewal of coverage.
Distinguishing Types of Damage
Nationwide, less than 40% of home insurance claims are for water damage. However, insurance companies do not distinguish between types of water damage. CLUE reports identify water damage as either a “freeze” (burst pipes, whether caused by cold weather or not) or water damage (water leaks through pipes, causing damage to sheet rock and other materials).
The insurance industry does not have a standard definition for pinhole leaks. As a result, the issue becomes whether pinhole leaks in copper plumbing qualify as sudden damage i.e. a “freeze”, or are simply considered a maintenance issue.
Non-Renewal or Cancellation of a Policy
Insurers in most cases will renew an existing policy for homeowners who report pinhole leaks. However, some insurance companies will not renew a homeowner’s policy based on prior pinhole leaks if the frequency of those leaks exceeds the threshold for claims that is established by the insurance company. The reason, according to insurers, is that actuarial science shows that if a policy has one claim, the likelihood of the second claim increases, and a second claim greatly increases the chance of a third claim. Any claim, regardless of the nature or magnitude, increases the risk of a subsequent claim, according to the actuarial science relied upon by insurers. The extent of the damage caused by a pinhole leak may affect rates and trending, but the most important factor for insurers is the presence of any prior claims. The threshold for non-renewal of a homeowner’s insurance policy varies from company to company.
Based on the claims history, an insurance company might apply a surcharge to the homeowners’ premium to cover the increased risk of damage, or increase the deductible on a policy. In addition, an insurance company may deny coverage for a prospective homebuyer, if the property has a history of prior water damage claims.
If an insurer takes an adverse action against a policyholder based on information in the CLUE database, they must notify the policyholder, through an Adverse Action Letter, that the source of the adverse action was information obtained in a CLUE report. The policyholder has the right to order a copy of the CLUE report. ChoicePoint serves as the point of contact in such a dispute. The insurance company must reply to ChoicePoint within 30 days with proof of the claim. If there is no proof, ChoicePoint removes the data from CLUE.
Obtaining Insurance Coverage when Adverse Action Occurs
The Maryland Joint Insurance Association (JIA) offers property insurance to Maryland residents who have had trouble finding coverage in the competitive marketplace. (MD MIA) The JIA will provide coverage for Maryland homeowners unable to obtain property insurance through the competitive property/casualty insurance marketplace. The JIA encourages applicants to seek coverage in the competitive marketplace first, and then to apply for coverage with the JIA through licensed property/casualty insurance agents. However, any applicant may apply directly to the JIA for coverage.
12 December 2004
State of Maryland
Final Report: Task Force to Study Pinhole Leaks in Copper Plumbing
If one is unable to obtain insurance through JIA, unregulated insurance entities are the next step. Insurance companies often establish unregulated subsidiaries—so-called Lloyd’s companies and reciprocal exchanges—to provide insurance in these cases. State insurance departments do not govern such subsidiaries. These companies may be self-underwritten or in some cases receive backing from a larger corporation. They are the insurers of last resort.
III. The Physical Elements of the Problem
A. Water
Public Water Suppliers
There are several types of public water suppliers in the State of Maryland: