Ruptured pipes, water backup & water under the house

Coverage Q&A: ‘Would a flood by any other name . . .’ This week’s question dissects how 'flood' is defined and when exclusions apply.

The (insurance) company has determined that flooding was the proximate cause of the damage, as it diverted water and put pressure on the sewer line, and listed “flood” as the exclusion. We don’t think the claim should be denied based on flooding. (Credit: Ozgur Coskun/Shutterstock.com)

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: One of the most important parts of any insurance policy is the definitions section. Certain terms are defined so that it is clear to the insured what the carrier means when it uses certain terms. Likewise, policy language is at times very specific as to how and when coverage applies. Not every carrier uses the same definitions for terms, and it is important to be sure when dealing with any given policy that you are working within the terms of that specific policy and the wording of how coverage applies.

Question: The insured has an HO3 and during Storm Ida a pipe ruptured under the house causing water to back up into the basement. The sump pump failed, resulting in water damage to the finished basement. In addition, the accumulation of water under the house caused a sinkhole and the foundation shifted making the house unlivable.

Hanover has denied coverage for the loss but they did pay for the repair of the pipe that ruptured under the policy’s service line coverage. The (insurance) company has determined that flooding was the proximate cause of the damage, as it diverted water and put pressure on the sewer line, and listed “flood” as the exclusion. We don’t think the claim should be denied based on flooding. FEMA defines “flood” as affecting two acres or two or more homes. While seven inches of rain put pressure on the pipe, had the pipe not burst there would have been no claim.

— New York Subscriber

Answer The problem with the FEMA definition of flood is just that; it’s the FEMA definition of flood, and not the definition of flood in the HO 00 03. When a term is not defined in a policy courts turn to a standard desk reference dictionary since that is what the general public has access to.

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