We are engaged in what seems to be a never-ending battle with an insurer over claims for damage done when a sump pump fails. The HO-3 policy in question is an older version that defines water damage as follows: "(1) Flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind; "(2) Water which backs up through sewers or drains; or "(3) Water below the surface of the ground, including water which exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structure."

The definition contains no reference to sump pumps. Recently one of our HO-3 insureds suffered severe damage to his basement when the sump pump overflowed. The adjuster first tried to deny the claim as back-up of a sewer or drain.

When we pointed out to him that a sump pump is not a sewer or drain and that the policy in question does not mention sump pumps, he hemmed and hawed. He is now denying the claim based on number 3, above—water beneath the surface of the ground.

We have tried and tried to reason with him and his supervisor. They have been adamant in their denial of the claim. In the meantime, our insured has spent several thousands of his own dollars in repairing the damage to his basement.

What is the correct answer here?

North Dakota Subscriber

When water overflows from a sump, the insured has suffered a plumbing overflow. According to the Random House Unabridged Dictionary, "plumbing" is "the system of pipes and other apparatus for conveying water, liquid waste, etc., as in a building." The sump pump is therefore part of a home's plumbing system. This is why ISO changed the wording on the water damage exclusion to specify that overflow or back-up of a sump is water damage. However, some insurers did not adopt this ISO wording, so unless the policy contains the specific wording that defines water damage as including sump pump back-up or overflow, such damage is covered as a plumbing overflow.

The exclusion of "water beneath the surface of the ground" is intended to exclude coverage for "hydrostatic water pressure"—water that applies pressure against the walls of the basement and seeps in. This is apparent from the wording. It was not intended to exclude water damage from a sump pump.

The exclusion is there because this is one of those things that is likely to happen in a room that is located below the surface of the ground. Many insurers offer their customers the opportunity to "buy back" this exclusion for just a few dollars a year.

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