A condominium has a drinking water pipe that was vandalized and a large amount of water leaked. The pipe was insured and the increase in the cost of the water bill is claimed. The adjuster indicates that water is not coverage under Section 2. Property not Coverage letter H. Land (Including land on which the property is located) water, growing crops or lawns (other than lawns which are part of a vegetated roof. Is it true that this exclusion does not apply to this type of damage?
Kentucky Subscriber
Exclusions are to be read narrowly, and there's a significant difference between the exclusion for water that appears in conjunction with the exclusion for land, crops, and lawns. The water that leaked as a result of the vandalized pipe is completely different, and not included in the exclusion cited. Otherwise, there would be no coverage for any water leaks if the exclusion was read that broadly. The increase in the water bill would be taken into consideration in calculating a loss of business income. Since the pipe vandalism was a covered cause of loss, then business income coverage would need to be in place and the increased water expenses would be calculated to determine if that increase caused a loss of income to the insured's operations.