Claims Guru: Water Damage Covered or Not by Special Form?

[yorkriver1]

So, veterans in this biz say that adjusters don't always really know policy language. Have to keep after them. I have heard some wild stories about policy interpretation, too geeky for this thread, but trust me, wow, just wow.

Section II, liability, of the upstairs resident's policy should be where coverage lies, if we are talking damage to downstairs person's contents. Overflow of plumbing from "off premises" *is* covered on Special form (not on Broad form), but only for the building damage, not contents. Contents is covered for no better than Broad form perils on almost all HO type policies.

Several posters have said this. It seems the downstairs resident has no coverage for damage to their contents from this peril. The at fault neighbor has liability coverage for negligence. If forgetting to turn off water isn't negligence, well, shut the front door...

 

[bobson]

How much is the damage? Probably needs to find an attorney.

 

[djs]

The good news is that no where is this water backup. Somebody wrote that term somewhere and its stuck. It needs to be unstuck. The claim isn't water backup, as the water didn't backup from a sewer or drain, wasn't surface water, etc, etc.

Its water damage.

The upstairs tenant is liable, but even the insureds policy will cover it (and subrogate) if it is properly worded.

Dan

 

[insurance1822]

THIS IS NOT WATER BACKUP (obviously)

Named peril's include accidental discharge or overflow of plumbing so the contents should be covered on their insurance (who can then subrogate against the *** neighbor.) It could be as simple as the moron neighbor calling their carrier saying "yeah water backed up from the sink.." and you have an equal *** on the claims end.

Here's some interesting news...Allstate (for example) excludes liability from their renter's policy for damage caused by water such as this...

 

[yorkriver1]

Right, insurance 1822, "premises" probably would mean the building, not just the apartment of the insured. Therefore, no overflow originating off premises exclusion. So overflow should be covered by the policy.

With carriers mailing out policies direct to policyholders, it's hard sometimes to get a copy of an actual policy doc to read what it says.

 

[bobson]

Right, insurance 1822, "premises" probably would mean the building, not just the apartment of the insured. Therefore, no overflow originating off premises exclusion. So overflow should be covered by the policy.

With carriers mailing out policies direct to policyholders, it's hard sometimes to get a copy of an actual policy doc to read what it says.

I have a file on my server with them saved for easy access. If I don't have the form I need pull it off the interweb and save it to my server.

 

[jennellen]

If you do this claim as a report only claim and just put the carrier on notice, pay for this out of pocket, draft a release form and get a lawyer to approve it then get the claimant to sign it. Done deal.

 

[yorkriver1]

If our original posting agent is still dealing with the issue, this week the P&C topic in the IIAV monthly Virtual University "Ask the Experts" column is just this issue: neighbor's plumbing causes water to come into house, damage results. Another possibly pain inducing twist: in lots of states the case law precedents allow liability carriers to pay ACV rather than replacement cost if a property damage settlement is paid under liability. There is also a discussion involving the off premises overflow of plumbing coverage.
The final conclusion is that reading the actual policy of the insured is key to how to pursue the case. Policies may vary from ISO, and then there are the editions of ISO. The experts state that lawyers may have to be involved if the claim size warrants.
PM me if you would like the two articles addressing the issue.
Side comment, there is also a great article about whether a propane gas tank exploding on a food truck while it is parked and functioning as a commercial kitchen is covered on the CGL or auto liability. They address the question: is it an auto accident, or mobile equipment liability. Not as easy as it appears.

 

[Milkman1265]

thanks, yes its still an ongoing issue, our own insured's insurer is not paying for certain things claiming the fix belongs to the landlord or condo board type entity.

Neighbor's insurer declined liability claim, because they specifically have a water damage exclusion on their liability side.

 

[jennellen]

What in the hell.........

that was meant for another post and I don't know how to delete my post.