The Court of Appeals of New York ruled the water exclusion in a policy precluded coverage after water flowed into the plaintiffs' home from a ruptured water main. The case is Platek v. Town of Hamburg, 26 N.E.3d 1167 (N.Y. 2015). 

The Plateks suffered a water loss when an underground water pipe burst and flooded their finished basement. They submitted a claim for damages under the homeowners policy they had purchased from Allstate Indemnity Company. Their claim was denied on the basis of the policy exclusion for losses caused by water under the surface of the ground. 

The Plateks sued Allstate and requested a declaration of coverage, alleging they had suffered more than $100,000 after Allstate wrongfully denied their claim. They did not argue that their claim was not excluded, but they said the damages were the result of an "explosion" of the water main due to subsurface water and were therefore covered under the exception to the water exclusion. Allstate maintained the water exclusion precluded coverage for a loss due to "[w]ater . . . on or below the surface of the ground, regardless of its source" (emphasis added), so the Plateks claim was not covered. Both parties filed for summary judgment in their favor. The trial court granted summary judgment to the Plateks, declaring their loss was covered and Allstate was obligated to pay their claim.