Michigan floods caused dry wells. Does insurance cover the loss?

Coverage Q&A: Recents dam failures in Michigan caused more issues for homeowners than just flooding.

Buildings surrounded by floodwater in Midland, Michigan. (Photo: Bloomberg)

Every claim is different, and some insurance policies can be difficult to interpret for unique situations. FC&S Expert Coverage Interpretation, the recognized authority on insurance coverage interpretation and analysis for the P&C industry, makes it simple to find credible answers to your complicated coverage questions. Analysis brought to you by our FC&S experts. 

Editor’s Note: This week, we have a loss related to, but not directly caused by, the recent Michigan dam floods.

Question: A few weeks ago, two dams failed in Michigan, causing severe flooding in some areas when a lake drained into the river. The homes around the lake did not experience flooding but are now having issues with their wells going dry. Well drillers are attributing this to the dam breakage and water rushing out of the lake. Residents are now looking to their insurance policies to assist in either driving a new well or hooking into city water. Is there a justifiable exclusion, or is this something that could be covered?

— Michigan Subscriber

Analysis: Water losses must always be carefully reviewed, as there are many exclusions for water damage in insurance policies, such as floods, storm surge, and water below the surface of the ground, among other water issues. Then, on the other hand, losses caused by the accidental discharge of plumbing, heating, air conditioning devices, or household appliances are generally covered, for example.

Answer: To learn the answer to this week’s coverage Q&A, please log into your FC&S Expert Coverage Interpretation account.

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