Water Damage Claims from Plumbing Leaks Necessitate Skilled Interpretation of Policy Language

Water damage to a home caused by water penetration can cause both structural and cosmetic losses.  Whether the water-related peril causing loss is a burst pipe, defective hot water heater, or wind damaged roofing tiles, prolonged exposure to the elements can compromise a property owner’s claim.  Although resolution of the issue of a loss caused by water over a prolonged period can vary from state to state, a recent decision out of a federal court in Utah reveals the potential problems posed by water damage that occurs over an extended period.

In Wheeler v. Allstate Ins. Co., the insured suffered significant water damage to a cabin that was left unattended during the winter season of 2010-2011.  In April 2011, friends of the property owner entered the cabin and observed several inches of water covering the floor of the premises.  The prolonged moisture fostered the growth of significant mold throughout the interior of the structure.  The mold covered the walls, ceiling, appliances, and other surfaces.  The thickness of the growth made it impossible to open the front door and caused the overhead fan to sag down from the ceiling.  The contractor for the insured had observed the practice of leaving both the water and heat on to prevent the plumbing pipes from freezing and bursting.

In determining whether the claim was covered, the court focused on two separate provisions in the homeowner’s insurance policy. 

  • Exclusion 3: “We do not cover loss to the property . . . consisting of or caused by . . . continuous or repeated seepage or leakage over a period of weeks, months, or years, of water . . . from a plumbing . . . system, or . . . from within or around any plumbing fixture, including . . . sinks.”
  • Exclusion 7: This exclusion involved loss caused by wear and tear subject to an important exception: (1) loss that is a “sudden or accidental” escape of water from a plumbing system within the home or (2) water loss that is not otherwise excluded.

The court sided with the insurer with respect to the impact of Exclusion 7.  According to the reasoning of the court, the loss was not “sudden and accidental” because it occurred over a period of months.  Further, the loss was “otherwise excluded” because it occurred over a period of “days, weeks, or months” under Exception 3.

While the insured contended the policy was ambiguous in terms of the meanings of “leakage” and
“seepage, the court rejected the notion that these terms were ambiguous.  The insured contended that the terms were ambiguous because the plumbing leak was “sudden and accidental” when it occurred.  However, the court indicated that ignoring such a leak so that is not mitigated for an extended period is clearly not sudden.

This decision illustrates the subtle and apparently contradicting provisions in a homeowner’s policy which can impact water damage claims caused by plumbing leaks.  Our Miami homeowner’s insurance claims law firm invites you to contact us if you are having difficulties with your insurance company.  Miami insurance claims lawyer J.P. Gonzalez-Sirgo handles claims disputes involving property damage under insurance policies in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations.  No Recovery, No Lawyer Fees.  Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

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