Insurance coverage Q&A: An abundance of water, but from where?
When the insured's away and the water leaks, is there coverage?
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What is the intended definition of “the presence of water“?
It appears the insurance company is interpreting that once the presence of water (that caused covered damages) extends into a period that qualifies as “weeks, months or years,” then all damages caused by that water are now considered excluded. We do not think this is the proper interpretation of the policy.
We would like your interpretation of the following policy language, specifically concerning the phrase “the presence of water.” We would also like your opinion of the following scenario. Given the information below, and barring any extra applicable exclusions, should coverage for the water damages be afforded?
EXCLUSION: Constant or repeating gradual or slow release, seepage or leakage of water: A constant or repeating gradual or slow release, seepage or leakage of water or the presence of water, condensation or humidity, moisture or vapor, over a period of weeks, months or years, regardless of the volume of water involved. We do not cover the presence of any form of water over a period of weeks, months or years, from any constant or repeating gradual or slow seepage, leakage, trickle, collection, spray or mist, or the infiltration or overflow of water from any source.
Here is the Scenario:
• Homeowner was out of town for four months (June 30 – September 30) but had people entering the home from time to time to check on the house.
• A neighbor checked on the house on September 15, and found massive water and mold damage in the downstairs rooms. These rooms are directly below an upstairs bathroom in which a leak detection company stated, “After all testing, through the process of elimination I believe issues with the toilet in the bathroom upstairs which runs and possibly either overflowed or may have a bad wax ring or seal underneath it to being the source of origin. No other leaks or problems were found.”
• Water bill/records show no water consumption at the insured premises from June 30th – July 11th. Then, during a nine day period from July 13 – July 21 there were 6,050 gallons of water consumption. After July 21, there were only a few days of water consumption (10 gallons here, 40 gallons there, one day 90 gallons). Most of the days after July 21 until the date of discovery on September 14 showed zero gallons of consumption.
• The carrier extended coverage for mold and paid the policy limit of $25,000 but denied the water damage portion of the claim. The carrier’s position is that the water damage is not covered because, even though the water event was less than a “period of weeks, months or years,” the water sat from the date of loss to the date of discovery meaning that the “presence of water” was a period of weeks or months, and therefore excluded.
• Carrier denial letter, “We have determined that any water damage was due to the presence of water over an extended period of time, which is excluded from coverage.”
In light of the above, should the water damage sustained by the insured be covered, and why? Is the carrier using the “presence of water” portion of the policy to correctly deny the claim? Wouldn’t the water damage that happened immediately during the 6,050 Gallon July event be covered? The 6,050-gallon water event was neither slow nor gradual and only lasted 9 days, not weeks, months, or years.
Thank you for your opinions!
— Florida Subscriber
Exclusions are to be read narrowly. The exclusion language in your policy is for (emphasis mine) “constant or repeating gradual or slow release, seepage, or leakage of water or the presence of water, condensation or humidity, moisture or vapor, over a period of weeks…” and ” We do not cover the presence of any form of water over a period of weeks, months or years, from any constant or repeating gradual or slow seepage, leakage, trickle, collection, spray or mist, or the infiltration or overflow of water from any source.”
The policy goes out of its way to point out that coverage is excluded for slow leaks, and not sudden discharges. While there was water present for a period of time, it did not come from a “ constant or repeating gradual or slow seepage, leakage, trickle.”
However, the exclusion contains “or” language. With that, it is also excluding “the infiltration or overflow of water from any source.” This is very specific and means the water must be from an infiltration or overflow. Merriam-Webster defines an overflow as when water flows over the brim of, or flows over bounds, or fills a space to capacity and spreads beyond its limits. Infiltrate is defined as: “To permeate something by penetrating its pores or interstices; to pass through a substance or area by filtering or insulating gradually.”
So your issue is whether or not the toilet overflowed and would be excluded. An overflow is not a discharge from a leaky ring, and infiltration is still a slower process.
An average person uses 60 gallons of water a day and with 6,050 gallons of water being used between July 13 and July 21, for a one-person household there would have been 480 gallons used over eight days. Even with four residents, only 1,920 gallons would have been used over eight days, far less than what ran through the insured’s house. The average leaky toilet can waste 200 gallons a day, which is still only 1,600 gallons in the eight days.
The exclusion for a gradual or slow leak, discharge, or seepage or an infiltration or overflow of water from the toilet does not fit. You could have a plumber verify that the toilet did not overflow. Once that is ruled out, there should be coverage.
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