The insured owns an office building with a basement. There was a water main that ruptured directly under the basement floor. The water caused the basement floor to heave and the basement filled up with several feet of water overnight. The policy is a BP 00 02 12 99. The carrier has asserted the loss is excluded under the water exclusion which provides, in part, that they exclude water damage from "water under the ground surface pressing on, or flowing, or seeping through . . . basements." It has always been my understanding that this language was designed to exclude natural water that seeps up through a basement floor. In our case we have a ruptured pipe that broke through the basement floor, the water is from the broken pipe and should therefore be covered. The carrier, has also asserted that the pipe likely broke from corrosion, latent defect, or wear and tear, which is also excluded. However, the policy specifically states that if a "specified cause of loss" results from one of those excluded causes then the resulting damage is covered. And, of course, "water damage" is a specified cause of loss. We think this loss should be covered. Please give us your thoughts.

Michigan Subscriber

Based on findings from several related court cases, it has been determined that the rupture of a water main is different from water that is flowing underground due to flooding or other circumstances. The main broke, putting probably thousands of gallons out at once instead of flood that puts thousands of gallons into the ground over a period of time, even if at times is it rapid. This is a sudden event.