In my previous posts, I’ve shared my personal story of battling United Utilities, unpacked who really owns our water system, explored renationalisation, and examined the regulators. Now we arrive at one of the most troubling trends in the industry: the way water companies increasingly shift responsibility and costs onto insurance companies and, ultimately, customers.
This practice doesn’t just affect individuals like me. It has the potential to destabilise both the water sector and the home insurance market — with serious consequences for every household in the UK.
The Hidden Rule: “Your Pipe, Your Problem”
One of the most significant changes in recent years has been how water companies define responsibility for leaks and pipe damage:
- If a pipe bursts or leaks in the public highway, the water company usually fixes it.
- But if the problem is on your property, even underground before it enters your house, the company often insists it is your responsibility.
This line in the ground may sound simple, but it means that homeowners are being pushed to take out claims on their buildings insurance for problems that, many argue, should be the utility’s responsibility.
Why This Matters
For customers:
- Unexpected costs – Many homeowners face excess payments, rising premiums, or exclusions when insurers argue the water company should be responsible.
- Stress and disruption – Weeks or months of damage, uncertainty, and disputes between utilities and insurers.
- No alternative – Because water is a monopoly, customers can’t choose a provider with fairer policies.
For insurers:
- Cost-shifting – As water companies refuse responsibility, insurers are paying out more claims.
- Higher risk exposure – Underground leaks and pipe bursts are expensive, disruptive, and increasingly common.
- Pressure on premiums – Costs pushed onto insurers inevitably feed back into higher premiums for everyone.
For the industry as a whole:
- Broken accountability – Customers are paying twice: once through bills, again through insurance.
- Conflict of interest – Water companies keep profits flowing to investors, while offloading risk onto others.
The Wider Pattern of Cost Shifting
My case isn’t unique. Research and customer stories reveal a clear pattern:
- Customers discovering leaks under their driveways or gardens are told to contact their insurers.
- Water companies are quick to deny responsibility, citing “private property” even when failures link directly to ageing infrastructure.
- Insurers dispute claims, leading to stalemates that leave customers without water or facing legal costs.
This pattern means that the true cost of failing infrastructure is being hidden. Instead of appearing on water company balance sheets, it is spread across millions of household insurance policies.
What Regulators Say
Regulators, including Ofwat, claim they monitor how companies treat customers. Yet there is little visible intervention when responsibility is shifted onto insurers. The Financial Ombudsman Service (FOS) can review disputes involving insurers, but not the water companies themselves. This leaves a gap where customers fall between the cracks of two industries.
The Risks to the Insurance Market
If this trend continues, the implications for insurers — and their customers — could be severe:
- Rising Premiums: As insurers absorb more water-related claims, premiums will rise for everyone.
- Exclusions: Some policies may begin excluding water infrastructure damage, leaving customers exposed.
- Systemic Risk: With millions of households potentially affected, this could create a systemic problem across the home insurance market.
Imagine if 100, 1,000, or even more households across the country submitted detailed Subject Access Requests (SARs), GDPR data challenges, and complaints about these practices. The administrative and financial costs to both industries would escalate rapidly.
A Perfect Storm: Water and Insurance Together
The uncomfortable truth is that this isn’t just a water industry problem. By quietly passing costs to insurers, water companies have created an interlinked risk between two critical sectors:
- Water companies benefit by keeping shareholder dividends flowing.
- Insurers face mounting costs they didn’t sign up for.
- Customers get caught in the middle, paying higher bills and higher premiums while living with the stress and disruption.
Why It Matters to Me
In my own case, I’ve seen exactly how this plays out: responsibility denied, stress maximised, and the burden shifted elsewhere. For someone working from home, with my home also serving as my office, the lack of amenities and disruption wasn’t just inconvenient — it undermined my livelihood and well-being. Yet instead of accountability, I was offered a bureaucratic runaround.
The Bigger Picture
This cost-shifting is more than just an individual unfairness — it’s a sign of systemic failure:
- A monopoly industry protecting its investors at the expense of customers.
- Regulators asleep at the wheel, allowing these practices to continue unchecked.
- An insurance sector being used as a pressure valve, with the risk of bursting under the weight of hidden liabilities.
Where This Is Leading
The next post in this series will examine the potential damage to both the water and insurance industries if this continues unchecked. What happens when the public starts to see the full picture — and how might mass consumer action, from Subject Access Requests to collective complaints, force real accountability?
💧 Takeaway: Water companies are quietly shifting the cost of their failing infrastructure onto insurers and customers. This hidden transfer of risk threatens not only household finances but also the stability of the insurance industry itself. Without urgent reform, we are all paying twice — once on our water bill, and again on our insurance premium.