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A Case Study in How the Insurance Industry Rewards Proactive Risk Management
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After $4.4 million in claims pushed the annual premium from $88,000 to $346,000, 447 ProSentry Smart water leak and temperature sensors helped bring it back down to $160,000.
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Hardware and monitoring cost about $10,000 a year against $186,000 in annual savings.
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ProSentry has logged 367 water leak alerts and 23 low-temperature alerts at this property since December 2024, each resolved before causing damage.
An undetected sump pump failure flooded the building's automated parking system in 2020.
Documented monitoring data is what's making that possible after the 2020–2022 losses forced it into the non-admitted market.
A high-end condominium in downtown New York, completed in 2019, began experiencing water damage almost immediately. By the end of 2022, the building had filed four claims totaling $4.4 million, - all against a major "admitted" carrier whose premium was $88,000 per year. Admitted carriers are state-licensed and backed by a state guaranty fund with standardized, lower rates. Excess and Surplus (E&S) carriers are non-admitted allowing flexible coverage for high-risk exposures, - but without guaranty-fund protection and at much higher rates.
A broken sprinkler
head on the
seventh floor
A catastrophic garage flood
caused by an undetected
sump pump failure
The garage loss illustrates precisely what unmonitored buildings are exposed to. The building featured a high-tech automated parking system, - a computerized network of motors, racks, and sensors. During COVID, with the building largely empty, a basement sump pump failed silently. Water rose approximately 12 feet, submerging and destroying the entire system. A $70 sensor would have detected the sump pump's failure as soon as it occurred.
A penthouse water leak
that cascaded through
multiple units below
A bathtub faucet failure on
the third floor that damaged
two more apartments
beneath it
The "admitted" major carrier issued a non-renewal. No other New York State "admitted" carrier would take on the risk. The building was left with no broker solutions, a devastating loss history, and a property effectively uninsurable in the admitted market.
The national broker, HUB International, took over the account in 2022 with one immediate question: what was being done to prevent future losses? Without a credible answer, there was nothing to bring to insurance underwriters but a frightening loss run.
The property manager had already begun discussions with ProSentry. Though installation had not yet happened, HUB went to market with the building's intent to move forward with the proposal and secured a quote of $346,000 for property, GL, and umbrella coverage - nearly four times the prior premium, but the best available given the circumstances.
At the next renewal cycle, HUB confirmed that 447 ProSentry Smart water leak sensors had been installed across every unit and key risk point in the building. That single fact transformed the underwriting conversation. For the first time, HUB could present not just a promise of better behavior, but documented infrastructure, - real-time monitoring, timestamped alerts, and verifiable coverage across every major water source in the building.
The result: a $50,000 reduction at that renewal, - roughly equivalent to the ProSentry hardware cost alone.
The financial impact has compounded with every clean renewal since:
Against a total system cost of $39,900 in hardware plus $499 per month for monitoring (approximately $10,000 per year when amortized over ten years), the insurance premium savings alone represent an approximately 18x annual return on investment. In addition:
The value of the monitoring system is best demonstrated by the claims it helps prevent. Since installation, ProSentry has documented the following detections and interventions at this building:
Since December 2024, ProSentry has recorded 367 water leak alerts and 23 low temperature alerts at this property, - each one detected, flagged, and resolved before causing damage or generating a claim.
The property's experience was not unique. Across ProSentry's full portfolio, an 18-month study tracked over 6,000 water leak events. Because of the efficacy of ProSentry's sensors catching water leaks at the first drops, and its trustworthy live operators who call the buildings within moments of the leak starting, building staff responds to those leak events.
Of those 6,000 events, the insurance claims resulting from those events were zero.
HUB was able to move the GL and umbrella coverage to an admitted carrier in the first year, but because of the substantial losses, property coverage remains non-admitted, - the 2020-2022 losses are still within the five-year lookback window, - but that is changing.
At the building's next renewal in approximately five to six months, HUB expects admitted property options to be available for the first time since the original admitted carrier non-renewed. The combination of a clean loss record and documented ProSentry monitoring is what makes that conversation possible.
A question worth addressing directly: why would an insurance broker recommend a system that lowers the premiums they earn commissions on?
The answer is straightforward for top quality brokers like HUB. High-premium excess and surplus placements produce short-term revenue but unstable relationships. Clients placed in non-admitted markets face higher deductibles, more exclusions, and more difficult coverage terms, - and the clients know it. They shop aggressively at renewal, blame their broker for rates they cannot control, and leave.High quality brokers, like HUB, recognize that admitted placements produce lower premiums, - but also better coverage, happier clients, and stronger broker-underwriter relationships. And for the broker, there is the E&O dimension: recommending a non-admitted placement with a $500,000 deductible and significant exclusions carries professional risk that a well-monitored, admitted placement does not.
I could sleep better at night knowing that they have good coverage.
For new construction buildings, - where insurance carriers frequently decline to quote in the first three to four years, and where water damage issues are most common as systems are broken in, - installing Smart water leak detection from day one is not a precaution. It is the difference between maintaining admitted coverage and losing it.
The numbers in this case are not complicated. A building that spent $4.4 million in insurance claims over three years, then watched its annual premium jump from $88,000 to $346,000, has now reduced that premium to $160,000, - and is on track to return to the admitted market for the first time since 2020.
ProSentry enables the building to stop leaks before they cause significant damage through instant, actionable alerts. Not promises of better maintenance or a new insurance broker. A network of 447 sensors generating real-time alerts that help prevent losses. Every detected water event is documented with a timestamped record of the alert and response, creating the history that underwriters evaluate. That clean loss history is what makes the building's improved insurance trajectory possible. At an annualized system cost of approximately $10,000 per year, the investment represents less than one-eighteenth of the building's annual insurance savings alone.
For any building navigating rising premiums, non-admitted placements, or a history of water claims, the question is not whether monitoring pays for itself. In this case, it paid for itself within the first year.
For buildings that currently benefit from low-cost admitted insurance coverage, the case for proactive installation is even stronger. Had this building installed ProSentry before experiencing these losses, while it still qualified for admitted coverage, its average annual insurance cost would have been approximately $107,071 instead of the $267,333 average it ultimately paid after reacting to the losses:
Installing ProSentry from day one and avoiding the losses altogether is the most economical choice by far.
After $4.4 million in claims pushed the annual premium from $88,000 to $346,000, 447 ProSentry Smart water leak and temperature sensors helped bring it back down to $160,000.
Hardware and monitoring cost about $10,000 a year against $186,000 in annual savings.
ProSentry has logged 367 water leak alerts and 23 low-temperature alerts at this property since December 2024, each resolved before causing damage.
An undetected sump pump failure flooded the building's automated parking system in 2020.
Documented monitoring data is what's making that possible after the 2020–2022 losses forced it into the non-admitted market.
A high-end condominium in downtown New York, completed in 2019, began experiencing water damage almost immediately. By the end of 2022, the building had filed four claims totaling $4.4 million, - all against a major "admitted" carrier whose premium was $88,000 per year. Admitted carriers are state-licensed and backed by a state guaranty fund with standardized, lower rates. Excess and Surplus (E&S) carriers are non-admitted allowing flexible coverage for high-risk exposures, - but without guaranty-fund protection and at much higher rates.
A broken sprinkler
head on the
seventh floor
A catastrophic garage flood
caused by an undetected
sump pump failure
The garage loss illustrates precisely what unmonitored buildings are exposed to. The building featured a high-tech automated parking system, - a computerized network of motors, racks, and sensors. During COVID, with the building largely empty, a basement sump pump failed silently. Water rose approximately 12 feet, submerging and destroying the entire system. A $70 sensor would have detected the sump pump's failure as soon as it occurred.
A penthouse water leak
that cascaded through
multiple units below
A bathtub faucet failure on
the third floor that damaged
two more apartments
beneath it
The "admitted" major carrier issued a non-renewal. No other New York State "admitted" carrier would take on the risk. The building was left with no broker solutions, a devastating loss history, and a property effectively uninsurable in the admitted market.
The national broker, HUB International, took over the account in 2022 with one immediate question: what was being done to prevent future losses? Without a credible answer, there was nothing to bring to insurance underwriters but a frightening loss run.
The property manager had already begun discussions with ProSentry. Though installation had not yet happened, HUB went to market with the building's intent to move forward with the proposal and secured a quote of $346,000 for property, GL, and umbrella coverage - nearly four times the prior premium, but the best available given the circumstances.
At the next renewal cycle, HUB confirmed that 447 ProSentry Smart water leak sensors had been installed across every unit and key risk point in the building. That single fact transformed the underwriting conversation. For the first time, HUB could present not just a promise of better behavior, but documented infrastructure, - real-time monitoring, timestamped alerts, and verifiable coverage across every major water source in the building.
The result: a $50,000 reduction at that renewal, - roughly equivalent to the ProSentry hardware cost alone.
The financial impact has compounded with every clean renewal since:
Against a total system cost of $39,900 in hardware plus $499 per month for monitoring (approximately $10,000 per year when amortized over ten years), the insurance premium savings alone represent an approximately 18x annual return on investment. In addition:
The value of the monitoring system is best demonstrated by the claims it helps prevent. Since installation, ProSentry has documented the following detections and interventions at this building:
Since December 2024, ProSentry has recorded 367 water leak alerts and 23 low temperature alerts at this property, - each one detected, flagged, and resolved before causing damage or generating a claim.
The property's experience was not unique. Across ProSentry's full portfolio, an 18-month study tracked over 6,000 water leak events. Because of the efficacy of ProSentry's sensors catching water leaks at the first drops, and its trustworthy live operators who call the buildings within moments of the leak starting, building staff responds to those leak events.
Of those 6,000 events, the insurance claims resulting from those events were zero.
HUB was able to move the GL and umbrella coverage to an admitted carrier in the first year, but because of the substantial losses, property coverage remains non-admitted, - the 2020-2022 losses are still within the five-year lookback window, - but that is changing.
At the building's next renewal in approximately five to six months, HUB expects admitted property options to be available for the first time since the original admitted carrier non-renewed. The combination of a clean loss record and documented ProSentry monitoring is what makes that conversation possible.
A question worth addressing directly: why would an insurance broker recommend a system that lowers the premiums they earn commissions on?
The answer is straightforward for top quality brokers like HUB. High-premium excess and surplus placements produce short-term revenue but unstable relationships. Clients placed in non-admitted markets face higher deductibles, more exclusions, and more difficult coverage terms, - and the clients know it. They shop aggressively at renewal, blame their broker for rates they cannot control, and leave.High quality brokers, like HUB, recognize that admitted placements produce lower premiums, - but also better coverage, happier clients, and stronger broker-underwriter relationships. And for the broker, there is the E&O dimension: recommending a non-admitted placement with a $500,000 deductible and significant exclusions carries professional risk that a well-monitored, admitted placement does not.
I could sleep better at night knowing that they have good coverage.
For new construction buildings, - where insurance carriers frequently decline to quote in the first three to four years, and where water damage issues are most common as systems are broken in, - installing Smart water leak detection from day one is not a precaution. It is the difference between maintaining admitted coverage and losing it.
The numbers in this case are not complicated. A building that spent $4.4 million in insurance claims over three years, then watched its annual premium jump from $88,000 to $346,000, has now reduced that premium to $160,000, - and is on track to return to the admitted market for the first time since 2020.
ProSentry enables the building to stop leaks before they cause significant damage through instant, actionable alerts. Not promises of better maintenance or a new insurance broker. A network of 447 sensors generating real-time alerts that help prevent losses. Every detected water event is documented with a timestamped record of the alert and response, creating the history that underwriters evaluate. That clean loss history is what makes the building's improved insurance trajectory possible. At an annualized system cost of approximately $10,000 per year, the investment represents less than one-eighteenth of the building's annual insurance savings alone.
For any building navigating rising premiums, non-admitted placements, or a history of water claims, the question is not whether monitoring pays for itself. In this case, it paid for itself within the first year.
For buildings that currently benefit from low-cost admitted insurance coverage, the case for proactive installation is even stronger. Had this building installed ProSentry before experiencing these losses, while it still qualified for admitted coverage, its average annual insurance cost would have been approximately $107,071 instead of the $267,333 average it ultimately paid after reacting to the losses:
Installing ProSentry from day one and avoiding the losses altogether is the most economical choice by far.
Insights, innovations and updates from the ProSentry Knowledge Base
ProSentry introduces the Water Damage Prevention Score, a free risk assessment designed to help Boards, property owners, and managers identify vulnerabilities and strengthen their building's risk mitigation strategy.
ProSentry CEO Nadav Schnall joins The Real Estate Pros Show – Powered by Investor Fuel to discuss how proactive risk technology helps property owners detect issues early, prevent insurance losses, and better protect commercial and multi-family real estate assets.
ProSentry introduces the Water Damage Prevention Score, a free risk assessment designed to help Boards, property owners, and managers identify vulnerabilities and strengthen their building's risk mitigation strategy.
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