How Smart Water Leak Detection Can Help Reduce Insurance Costs

Can a water leak detection device insurance discount lower your property insurance costs? It can, but only when the insurer’s rating plan allows it. Insurers adjust prices using rating plans, and state rules govern how those plans work. Florida’s rule, for example, requires each plan to clearly define who is eligible and caps credits or debits under subjective plans at 25% for any one policy.

This guide explains the forms an insurance benefit can take, which facility rules apply, and what records insurers and brokers look for.

Types of Water Leak Detection Device Insurance Discounts 

Insurance benefits can come as lower premiums, better deductibles, higher limits, or free sensors. 

Insurance brokerage IMA Financial Group says leak detection can make a property a more attractive risk to insurers. That can mean more insurers competing for your business, and possibly lower water deductibles or higher water limits. IMA also shares the case of a client whose past water losses led to high deductibles and insurers refusing to quote.

Some carriers run their own sensor programs, but these come with trade-offs. The Hartford’s program lists hospitals, medical outpatient facilities, education, and Class A/B office buildings as eligible. The sensors come from technology providers The Hartford partners with, and The Hartford reserves the right to choose which insured locations get them. Sensors, installation, and monitoring are covered for the first year, and then the ongoing cost moves to the policyholder. Alerts come through the provider’s mobile app, so the sensors run separately from your facility’s own compliance records and dashboards. 

Nationwide offers a similar optional program, with devices and monitoring provided by Hartford Steam Boiler (HSB) at no additional charge, subject to a participant agreement.

If you would rather choose your own system, ask your broker one question before you decide: “Will you recognize a system we choose?”

How Insurance Rules Shape Discounts

Insurers adjust commercial property rates using rating plans. One common type is a subjective plan, often called schedule rating, where the underwriter applies credits or debits for individual risk characteristics. Florida's rule defines these as plans that list individual risk characteristics and apply a range of modifications to the manual rate.

So a credit has to fit the carrier's plan, and it can be offset by debits for other risk factors, such as past water losses.

Rules differ by state, so ask your broker how credits apply where your properties are.

Standards That Shape Leak Detection Decisions

The first three set broader building and safety duties and don’t address leak detection directly. The last two come from FM, a commercial property insurer, and deal with leak detection itself.

1. The Centers for Medicare & Medicaid Services (CMS), 42 CFR 482.41: CMS requires hospitals to maintain the physical plant, facilities, and equipment so patient safety is assured, but does not specify leak sensors.
2. Joint Commission: Joint Commission’s Physical Environment (PE) chapter, effective January 1, 2026, covers utility systems, and its water management standard addresses waterborne pathogens.
3. DNV, a hospital accrediting organization: DNV surveys hospitals annually under its National Integrated Accreditation for Healthcare Organizations (NIAHO) program, but leak detection is not tied to a specific DNV citation.
4. FM (Factory Mutual) Data Sheet 1-24: If your property is insured by FM, its loss prevention guidance may shape the recommendations you receive. A RiskLogic summary of Data Sheet 1-24 describes FM Approved flow detection on incoming water lines, alarms sent to a constantly attended location or monitored system, and shutoff options for high-flow alarms.
5. FM Approvals Standard 7745: FM 7745 is the standard for certifying liquid leak detection products. It covers spot, linear, and area detectors, roof leak detection, wired and wireless systems, and systems that close valves automatically. If your carrier asks for FM Approved equipment, ask which products qualify before you choose a system.

Why Does Early Detection Matter More Than the Discount?

Health care is among the industries with the highest frequency of water damage losses, according to The Hartford’s review of its 2015–2020 claims. The same review found that accidental water discharge caused 54% of claims, freezing pipes 23%, and sprinkler leakage 16%. The cost can be high. Chubb notes that water damage at hospitals and healthcare providers can bring losses ranging into the millions of dollars, along with business interruption and relocation costs.

All three causes start inside the building’s own water systems, which is where leak sensors go. Sensors can also leave a record of each event and how your team responded. See Hexmodal’s CMS survey checklist for how leak records support surveys.

The operating logic is simpler than a generalized loss average:

Water contact → detection → alert → acknowledgment → arrival → containment → corrective action → documented closure

What Are the High-Risk Areas for Water Damage? 

Start with consequence and detection delay, instead of coverage everywhere. FM recommends leak detection cables in high-risk areas such as data centers and mechanical or utility rooms. Other areas worth reviewing include water heaters, tanks, long pipe runs, labs, pharmacy storage, heating, ventilation, and air conditioning (HVAC) condensate pans, and buildings left unattended at night or on weekends.

Plans will differ for hospital campuses, pharmacies and labs, unattended clinics, and manufacturing sites. Unattended buildings need extra attention because nights and weekends extend detection time.

To rank each location, ask four questions. What could be damaged? How long could a leak go unnoticed? How far could water travel? Who can respond at that hour?

Records to Keep For Your Insurer

If you plan to raise leak detection with your broker, records make the conversation concrete. These can support a broker or underwriting review. 

Caption: Records that can support broker or underwriting review. Requirements vary by insurer.

Questions to Ask Your Broker Before You Buy

Before you choose a system, get your insurer’s expectations in writing. These questions can help. 

• Does the carrier recognize leak detection as a risk control for these properties?

• Will you recognize a system we choose, or are specific vendors, devices, or FM Approved equipment required?

• Which building areas or equipment must be covered?

• Is continuous remote monitoring required?

• Is automatic water shutoff required, or is detection with a response process enough?

• What alert routing and response-time records do you expect?

• How often must sensors be inspected, tested, or maintained?

• What records must we send at placement or renewal?

• Could the system change our premium, deductible, limit, or eligibility, and by how much?

• What exact proof do you need, and who approves it?

How Hexmodal Smart Leak Detection Works

Once you know what your insurer expects, you need a system that can detect leaks, alert the right people, and keep the records.

Hexmodal’s Smart Leak Detection uses two sensor types:

• The HEX-L triggers on as little as 0.2 inches of water.
• The HEX-L-Z zone sensor uses 10-foot cables that extend to 30 feet, for placement around tanks, along pipe runs, or around room perimeters.

When a sensor detects water, Hexmodal sends alerts by call, text, or email, with custom user groups and escalation paths. That matters most at off-site clinics and medical office buildings, where staff may not be on site at night or on weekends.

Sensors are battery powered, with batteries that typically last five or more years, and install in about five minutes with no wiring. They connect through the Hex-G cellular gateway, which covers 250,000 square feet.

Hexmodal runs on its own LoRaWAN and cellular network, so nothing touches the facility’s Wi-Fi or Ethernet. At Eden Medical Center, Hexmodal installed 143 monitoring devices in less than a week with no information technology (IT) setup. That project did not include leak sensors.

Hexmodal’s implementation support team plans device placement and gateway coverage before installation and sets up user groups so alerts reach the right person.

The Hexmodal platform keeps time-stamped logs for every sensor reading and correction, lets teams view equipment across the entire portfolio, and exports PDF or CSV reports for audits. With CMMS integration, an alert creates a work order with the device name, location, event type, and timestamp already filled in.

The subscription includes 24/7 support, spare parts, replacement sensors, and batteries, with no hidden fees.

What your team still handles 

Hexmodal Smart Leak Detection detects water, alerts your team, and documents each event. It does not shut off water. Your team still responds, contains the water, makes repairs, and keeps a written procedure for water events.

If your insurer requires automatic shutoff or FM Approved equipment, confirm whether detection with a documented response process is acceptable.

Talk to Hexmodal about a leak detection plan for your facilities.  

Frequently Asked Questions

1. Do water leak detection devices lower commercial property insurance premiums?

Treatment varies by carrier and policy. It may appear as a premium credit, deductible change, eligibility decision, risk recommendation, or no direct adjustment. Ask the insurer or broker for the recognized technology, response, testing, and documentation requirements in writing before purchase.

2. What type of leak detection system do insurers look for?

There is no universal specification. A carrier may examine documented coverage, continuous monitoring, reliable alerts, assigned response, maintenance, testing, and event records. Ask whether it requires an approved vendor, certification, monitored service, or automatic shutoff. Do not assume a system is accepted without written confirmation.

3. Is leak detection the same as automatic water shutoff?

No. Detection identifies water and alerts responders. Automatic shutoff closes a valve to stop flow. Hexmodal’s verified functions are standing-water and moisture detection, targeted notifications, and event documentation. Ask the insurer whether detection is sufficient or whether a shutoff valve is required.

4. Where should commercial water leak sensors be installed?

Prioritize locations by consequence and likely detection delay, including mechanical rooms, tanks, pipe runs, server rooms, labs, pharmacy storage, equipment spaces, kitchens, water heaters, and unattended buildings. Final placement should reflect site conditions, manufacturer guidance, response capacity, and any insurer or engineering requirements.

5. What records should facilities teams keep after a leak alert?

Keep the event time and location, recipients notified, acknowledgment and arrival times, water source, actions taken, affected assets, corrective work, closure, and follow-up testing. Hexmodal event history, notification logs, and corrective-action documentation can help preserve that operational timeline.