Water Leakage Causes Covered Damage?

We have an insured that had a leak occur in the line running from her house to the municipal sewer. According to the local Borough, the leak caused the dirt to sink and compact which in turn caused a large hole under the sidewalk and part of the street.

The insured had to have the line dug up and repaired. The sidewalk was saved and the street repaired after the hole was filled in.

Her insurer is refusing to pay for the cost to do any of the repairs. We think, though, that since the insured was responsible for the yard and sidewalk, these costs should be covered.

Please give us your opinion.

Pennsylvania Subscriber

While the yard, sidewalk, and pipe might be the insured's responsibility to maintain, that does not make any of them covered property. The policy does not cover land, and the plumbing leak, from the line to the street, did no damage to covered property so as to trigger coverage for reasonable repairs. If the ISO HO 00 03 10 00 is involved, the cost to tear out and replace a part of an “other structure” is covered, but only if a building is first damaged by a plumbing leak.

As for the sidewalk, that might or might not be covered property. In the area where FC&S is located, the sidewalks belong to the municipality but it is the individual homeowner's responsibility to maintain them.

But, from what you state, this appears to be more of a liability claim against the insured rather than a first party property damage claim. The Borough might be alleging that the insured's negligent maintenance led to the damage to its property—the street and the sidewalk—and therefore, it is the insured's responsibility to repair the cause of the damage. So, this might mean getting the claims adjuster re-involved in the loss.

 

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