Flood, seepage, mold, wind driven, and sewage backup are all unforeseen damages to a home. With the word “water” showing up over 40 times in a standard homeowner’s policy, it is no wonder it is the most misunderstood coverage in a homeowner’s insurance policy.
Let’s take a lesson from a loss recently reported to us at ISU Insurance Services – The Olson Duncan Agency. A client called today when a plumbing fixture burst and water flowed not only into his condo but also into the condo below him causing damage to their unit and personal property. So how will their insurance company respond?
There is not much doubt about paying for damage to our client’s unit, because a sudden and accidental failure of a pipe would be covered under their homeowners insurance policy. “Sudden and accidental” are the important words in this case. If a leak happens over a period of time or if it is a result of faulty workmanship, design, or maintenance then there may be an issue with coverage. This is not the case in this example, so the most our insured homeowner would have to pay is their deductible.
What about damage to the neighbor’s condo? It was sudden and accidental for them also. If they have their own insurance, then they will also have coverage through their own policy. If they are relying on our client insured to cover the loss, they will have the burden to prove negligence on the part of the homeowner who had the pipe burst. This is not likely to happen because common law uses the standard of what a reasonable person would do to protect another from foreseeable risk of harm. In our case, our client had no indication that this would or could happen. If they knew there was a potential of the plumbing line failure and ignored it, then it would be possible that they would be found liable for the resulting damage to the neighbors’ unit.
Of course the homeowner feels bad and responsible, after all the pipe was in their unit so they feel there must be something they can do for the neighbor. There is an “I feel bad’ coverage in a homeowners policy called “property damage to others.” This coverage offers a small amount (usually $500) for damage to property of another person regardless of fault. This amount may not cover all the damages, but hopefully the neighbor realized he needed his own insurance policy and this will help offset the neighbor’s deductible.
Water damage in a homeowners policy can be challenging to understand. To speak with an expert about the coverage you need in your homeowners insurance, call ISU Insurance Services – The Olson Duncan Agency at (310) 373-6441 and ask for David Wellfare.