Water Damage Exclusions in Homeowner’s Policies Can Be Successfully Disputed

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

Many homeowners have their claims for water damage denied based on the language of the water damage provision in their policy.  Policyholders often run into disputes with their insurance company based on damage caused by water flowing through sewer pipes that backs up or overflows.  Insurers often rely on policy language excluding coverage for losses caused directly or indirectly from water backflow.  As a Miami water damage claims attorney we have successfully challenged insurer denials based on policy exclusions pertaining to water overflow or backup.

The case Junius Development, Inc. v. New York Marine and General Insurance provides an illustration of how a court might elect not to enforce such a denial.  The policyholder suffered water damage to areas of his business property caused by construction debris.  The insured alleged that a contractor who was performing work on the property caused the water damage when he dumped the contents from a water tank on the roof of the building into a drainpipe for the building.  The debris clogged the trap inside the drainpipe.  The pressure caused the pipe inside the building to burst, which resulted in damage to multiple areas of the building.

The policyholder submitted a claim that was denied based on the policy provision excluding coverage for damage caused by drain backup or overflow.  The insured sued the insurer for breach of contract.  The insurance company moved to dismiss the case based on the policy exclusion for water damage.  However, the court rejected the insurance company’s reliance on the exclusion and applied a high burden of proof on the homeowner’s insurance carrier.

The court indicated that the exclusion would only be enforced if the language was unmistakable and unambiguous.  The court further ruled that the insurance company also must establish that the exclusion clearly applies to the instance at issue and that the language of the provision does not allow for any other reasonable interpretation.

Subject to this standard, the court ruled that the insurance company failed to meet this high burden of proof.  The court reasoned that the loss experienced by the business owner was caused by the failure of the drainpipe which triggered the water damage to the facility.  Because the immediate and visible cause of the damage was the drainpipe bursting, the court rejected the argument that the claim was excluded based on the above referenced water damage exclusion.

The key point demonstrated by this blog post is that exclusions can be subject to complex legal standards and interpretations, so an insured should never simply accept an insurance company’s claim that a particular exclusion justifies the denial of his or her claim.   If your homeowner’s insurance claim has been denied based on an asserted policy exclusion, we are here to help.  My law firm represents policyholders in claims disputes 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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