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

[Milkman1265]

Is water damage from a neighbor's negligence (not shutting off water) and leaking onto personal property covered?

Special form has a clause

We do not cover loss if

"water that backs up through, overflows from, or is other wise discharged from:
A) a sewer or drain
B) a sump pump or related equipment or
C) any other type of system designed to remove subsurface water which is drained from the foundation area.


Now, is the peril here, neighbor/person negligence or water damage overflow from sink/facuet?

Also can it be argued that the sink is part of a drain and therefore a "drain system" and the water was overflowed therefore not covered under special form without the water backup/sewer endorsement?

 

[F150]

why dont you go after the neighbor?

 

[Milkman1265]

neighbor insurance denied claim for overflow of water and neighbor is refusing to pay.

 

[Herkster]

neighbor insurance denied claim for overflow of water and neighbor is refusing to pay.

Does the policyholder have proof that the neighbor caused the damage that he can provide to his insurance company? If so, I don't see why his company wouldn't pay the claim and subrogate it. Makes it tough in a he said / she said thing like this especially when the other party isn't cooperating.

 

[Milkman1265]

Neigbhbor = Upstairs tenant.

Upstairs admited it and also filed a claim with own insurance, and he has a video of the water pouring/leaking down onto his property.

 

[F150]

the water back up wont pay, but the liability will pay, seen it many times, same situation

 

[Milkman1265]

neighbor's carrier denied the liability based on water back up coverage not covered.

and insured's policy does not have water back up endorsement either.

 

[yorkriver1]

Yikes, on most Special form HO policies the contents is covered for Broad form perils. This is a shame for your client, but not your loss ratio. Off premises plumbing overflow is covered only on Special form (building), not Broad (contents on HO2,3,4 & 6). This is a specific topic in the P&C pre-licensing classes I teach.
HO3 most common HO sold, HO4 renters, both would have that exclusion. HO5, which I think of as kind of a specialty HO form, would have Special form perils on contents. Sounds like we have a condo or tenant situation.
Yep, liability is probably the best shot.

 

[F150]

neighbor's carrier denied the liability based on water back up coverage not covered.

and insured's policy does not have water back up endorsement either.

liabilty and water back up are two seperate things

You need to push this harder.

 

[Herkster]

liabilty and water back up are two seperate things

You need to push this harder.

x2

This has nothing to do with water back-up coverage. Upstairs neighbor is liable for the damage to the downstairs tenant. File the claim with his carrier, make them pay, and they'll subrogate it. If the company refuses to pay, it'll go to arbitration and they'll win there...I'd imagine.