MEC&F Expert Engineers

Saturday, December 27, 2014

Water Damage ~ is flood excluded in a Homeowners policy?

Water Damage ~ is flood excluded in a Homeowners policy?

 
The typical Homeowners (HO-3) policy, under SECTION I – PROPERTY EXCLUSIONS,  excludes “water damage” caused by:

(1)  Flood, surface water, waves, tidal water, tsunami, seiche, overflow of a body of water, storm surge or spray from any of these, whether or not driven by wind, including hurricane or similar storm.
(2)  release of water held by a dam, levee, dike or by a water or flood control device or structure.


There are two primary reasons it is necessary to exclude “flood” from a homeowners policy:
  • Flood losses are often devastating natural disasters that cause more property losses than any individual insurance company can financially withstand.
  • Most surface water losses can be prevented with proper landscaping of a property that drains water away from structures.   If these losses were covered, property owners would not go to the expense of preventative landscaping for the extreme weather events that occur in long cycles – like every ten, twenty or thirty years.  
National Flood Insurance Program (NFIP)If your property is located in a floodplain and your community participates in the NFIP, you can purchase flood insurance coverage. Your lender may require flood insurance as a condition of your loan.  The NFIP is administered by the Federal Emergency Management Agency (FEMA), which works closely with nearly 90 private insurance companies to offer flood insurance to property owners and renters through authorized property and casualty insurance agents.

Some insurers (called Wright Your Own or WYO insurers) are authorized to offer NFIP flood insurance. Rates are set and do not differ from company to company or agent to agent. These rates depend on many factors, which include the age and type of construction of your home, along with your building's level of risk for flood loss.

Water Damage ~ if water backs-up through my sewer or drain am I covered?

Water Damage ~ if water backs-up through my sewer or drain am I covered?

Nearly all property forms, including Homeowners policies, exclude or restrict water damage caused by the backup of sewers or drains.  The provisions vary from company to company but usually read like in SECTION I – PROPERTY EXCLUSIONS, that water damage is excluded if caused by:

Water or water-borne material which backs up through sewers or drains or which overflows or is discharged from a sump, sump pump or related equipment.

This exclusion is talking about “overflows” of water from sewers (like out of toilet bowls) and “backups” from drains (like floor drains and sinks).   The source of the water or sewage may be “off premises” from a plugged public sewer system or caused by water inside the home that is left on or stuck on which overwhelms a drain system that is plugged or restricted.

NOTE: Coverage for sewer or drain water backup can be added by endorsement for a small additional premium.  AMERICAN INSURANCE highly recommends that all Homeowner’s policies be endorsed with sewer and drain water backup coverage.  These type of claims can be costly to cleanup and repair.  Review your policy with your agent to determine what coverage, if any, is currently provided.

Why do Homeowners and other property forms exclude coverage for sewer or drain water backup?

1.  Water backup losses are extremely common but preventable with maintenance and preventative measures by the home owner.  Water losses from plugged up toilets and clogged up drains can be prevented or minimized when home owners are observant and promptly repair sticking toilet bowls and clogged, slow running drains.
2.   Water systems require periodic maintenance or reinvestment by the home owner. Over time, every water drainage system becomes restricted with rust, deposits and accumulated debris. Drain fields become saturated and tree roots interfere with drainage.  Without preventative maintenance, slow running drains won’t handle normal water flow or plug up completely. 
3.  Off premises sewage backups can be prevented with the installation of drain backflow preventers that are installed on your drain line.  Unfortunately, many older homes did not have these preventers installed.
4.  During flooding the water table rises and first causes water backup through sewers and drains.  Since “flood” is an excluded coverage, the unendorsed Homeowner’s policy has this exclusion.

Water Damage ~ if waters leaks through my foundation am I covered?

Water Damage ~ if waters leaks through my foundation am I covered?

Most property forms, including the typical Homeowners (HO-3) policy, under SECTION I – PROPERTY EXCLUSIONS, exclude “water damage” caused by: 

Water below the surface of the ground, including that which exerts pressure on, or seeps or leaks through a building, wall, bulkhead, sidewalk, driveway, foundation, swimming pool, hot tub or spa, including their filtration and circulation systems, or other structures.

To keep Homeowners policy premiums low and affordable for everyone, coverage is not afforded to losses that can be prevented by sound building practices or as a result of normal wear and tear rather than sudden and accidental events.  So, the main reasons it is necessary to exclude “water below the surface” from a Homeowners policy are:
  1. Current construction methods require the foundation to allow water to drain away from the home. Older homes may not have followed these methods or due to improper grading, the shifting of the soil or past severe water events, water may find a path to begin collecting underground next to the home.    If the intrusion of water through foundations were covered by insurance, then a home owner would have no incentive to correct the problem.  Covering these events would give rise to repeated claims after every periodic severe weather season.
  2. Over time, every foundation settles, cracks, and eventually deteriorates.  This “wear & tear” may require a home owner to excavate around the foundation (and basement) to place drain tiles and patch/re-seal the foundation and basement concrete walls.  Again, if this type of water loss was covered then a home owner would have no financial incentive to repair or improve their home.

WATER DAMAGE ~ Am I Covered?



WATER DAMAGE ~ Am I Covered?

Understanding which losses are covered and which are not will help you take the necessary precautions to avoid uninsured water losses. The damage from water can be devastating, expensive and always unexpected!  
The typical Homeowners policy (HO-3, Special Form) covers all risks of direct physical loss to your home including water damage but with significant exclusions and limitations.  Generally speaking, your Homeowners policy will pay for sudden and accidental water damage from inside water sources but does not pay for losses caused by water that finds its way into your home from the outside.   Where the water originated ultimately determines whether a loss may be covered or not. 
Click the following questions for explanations of the major water exclusions in a Homeowners policy.

Water Damage ~ is flood excluded in a Homeowners policy?Water Damage ~ if water backs-up through my sewer or drain am I covered?Water Damage ~ if waters leaks through my foundation am I covered?

Answers to other common water claims.Water Damage ~ if my roof leaks is the water damage covered? 

So, unless excluded or otherwise limited, water damage is a covered loss when caused after an inside water pipe leaks or breaks (like behind a wall or under a sink); or leaks from appliances (like hot water tanks, washing machines, or dishwashers).  Your property deductible is deducted from the covered loss.

LOSS SETTLEMENT:  It is important to note that it is the “damage” to your home from the water loss that is covered; NOT the repair to the actual item that failed.  Your Homeowners policy pays for the necessary costs to access (eg. cut open an undamaged wall to access a broken pipe and then pay to repair the wall) and repair the damage caused by the water.  But, the broken pipe itself, which failed because of wear and tear, decay, defective materials or methods of construction is not part of the covered loss.  The cost to repair the pipe or appliance is your responsibility. 


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LEX 18 Investigates: Utility Company Insurer Won't Pay For Damage Related To Broken Water Line
 At 5 p.m. Sunday, Tom Shannon says his family's cars were in good condition. 

Two hours later, they were covered in dents, dings and paint scratches, the Lexington man says, due to a water main break that sent water, mud and rocks soaring into his driveway. 

The worst part, he said, is that Kentucky American Water's insurance company has refused to pay to have the damage repaired. A water company spokesman confirmed the insurance claim was denied, even though the break occurred on a part of the line maintained by Kentucky American.

“In my mind, there's no question this is damage from their water main,” Shannon said.

LEX 18 Investigates obtained exclusive video of the geyser on Cranbrook Court, which was the result of a spontaneous rupture that cut water service to about 27 houses.

Kentucky American Water spokesman Charlie Boland declined to speak on camera. He said over the phone he could not discuss specific details of water customers' insurance claims. 

However, he gave some information about the water line break, which he said had no apparent cause. There was no construction going on, no apparent serious rust, and no drastic drop in temperature, all of which could contribute to a line breaking. 

“It's something we always look at, but there's not always an obvious reason,” he said. 

Boland said the line was an 8-inch, ductile iron pipe that had been installed in 1995, which is fairly new for water infrastructure. 

“We had no history of breaks on this section of main,” he said. 

Reports of the break initially came in about 6:30 p.m. Sunday.  Crews were on scene at 7 p.m., and water was back on for all customers four hours later. 

However, Shannon said the water had been running for some time before the water company could be reached. Several neighbors called police after they were unable to reach anyone at Kentucky American Water. The cops got in touch with the water company, he said. 

In the 30 minutes to an hour it took crews to respond, debris and water rained down on Shannon's family's cars, he said. 

He walked LEX 18 Investigative Reporter Richard Essex through the damage. His truck and his daughter's car both had numerous dings and scratches – some down to bare metal – that were the result of being pelted with rocks, he said. 

His daughter's boyfriend's car took the brunt of it, he said. He showed LEX 18 Investigates a passenger side mirror that had been knocked off, and the engine bay had been filled with gravel. 

When the break occurred, he told his family to move their cars, but before they could get to them, they heard what sounded like “popcorn,” he said – the sound of rocks landing. 

“I said ‘let's just leave it because somebody's going to get hurt if they go out there,” he said.

The next day, an insurance agent called him and confirmed they would not be paying any damages. 

“She proceeded to tell me ‘You know, that's not a really old water line. We wouldn't know that would happen and that it would break,'” he said. “And I said ‘Hang on. Are you getting ready to tell me you're not going to be covering any of this?” 

This is not the first time Kentucky American Water has denied insurance claims resulting from broken water lines. LEX 18 and other media outlets have covered similar stories in the past, typically for damages to houses. 

There also has been some confusion because, according to the Kentucky Public Service Commission, water lines leading from a customer's water meter to their home are the homeowner's responsibility to maintain and repair. Some homeowners don't know that. 

Shannon, a former plumber, said he used a tool access the meter and shut off water to a neighbor's house nearest to the geyser, which didn't stem the flow of the water and showed the break was on the water company's side.

“No one is trying to get ahead on this, but I sure would like to have my vehicles back to the condition they were in at 5 o'clock Sunday,” he said. 

Boland said Kentucky American Water would continue discussions with customers. 

ANOTHER CLOSE CALL: GARBAGE TRUCK BREAKS GAS LINE. GAS LEAK AT SALT LAKE BAKERY PROMPTS BUSINESS EVACUATIONS IN HONOLULU



Another Close Call: Garbage Truck Breaks Gas Line.  Gas leak at Salt Lake bakery prompts business evacuations in Honolulu

POSTED: 03:09 p.m. HST, Dec 26, 2014
LAST UPDATED: 03:09 p.m. HST, Dec 26, 2014 

Three businesses were evacuated Friday morning when a garbage truck caused a gas leak at a Salt Lake bakery Friday morning near the Target store, a fire spokesman said.
No injuries were reported, said Honolulu Fire Department spokesman Kevin Mokulehua.
A private garbage truck pinched a gas line while placing a garbage bin against a wall. The gas line was situated against the side of the building housing Larry's Wholesale Bakery, 4369 Lawehana St., Mokulehua said.

Twelve firefighters responded to the 6:53 a.m. alarm, and arrived at 7:01 a.m. They isolated the area, immediately evacuated the bakery and two other businesses downwind.
Mokulehua said the pinched line serves as a feeder line for a propane tank at the business.

Police assisted in the evacuation and performed traffic control.

The gas company arrived at 7:31 a.m. and repaired the damaged line.