Did you know that water damage is one of the most commonly cited reasons in claims on home insurance? This should not come as a total surprise considering the many possible causes of water damage – heavy rain, bursting of pipes, and the bathtub accidentally overflowing. However, insurance companies as of late have been increasing their denials on water damage claims.
Coming home to find a busted pipe has flooded your home is one of the biggest disasters a homeowner can face. Being mistreated by your insurance company can add insult to injury and can cost a South Florida homeowner tens of thousands of dollars. Especially if that insurance company improperly denies that water damage claim.
In a recent case, the Cheethams filed a claim with their insurer Southern Oak after their property sustained water damage when a pipe buried under the home deteriorated and caused waste water and material to back up into the home.
Southern Oak denied the claim and the Cheethams filed suit in Miami-Dade County Circuit Court. The judge assigned to handle the case for trial court agreed with the insurer that the damage was excluded from coverage under the Cheetham’s policy.
The homeowner then filed an appeal to the Third District Court of Appeal challenging the trial court’s ruling.
The Third District Court of Appeal was asked to make two important determinations:
(1) whether the policy was ambiguous; and
(2) whether the exclusion applied to the Cheetham’s situation.
Southern Oak argued that the policy excluded coverage for deterioration, as well as water damage. The Appellate Court, however, reasoned that while the damage would have been excluded under the policy because of the deterioration of the pipe, the coverage was extended under the exception when damages “result from discharge or overflow of water or steam from a plumbing system on the residence premises”.
The Appellate Court determined that, even though the policy didn’t define “plumbing system” that the pipe in the Cheetham’s case was a part of the plumbing system based on its designed function and dictionary definition.
Additionally the court reasoned that the pipe was on the residence premises and part of the system despite being buried under the home and the water exclusion the defendant pointed to only excludes water damage originating from outside the resident premises, not from within.
What does this mean for homeowners? The pertinent part was where the damage originated, had the broken pipe been off of the Cheetham’s property and caused water and debris to back up into their home, the Court would have excluded those damages from coverage. But because the pipe was a part of the Cheetham’s plumbing system and the problem causing the back up originated on their property the damage was covered under the insurance policy.
The first signs of water damage might seem trivial. But warnings like water stains on the ceilings or a leak under the kitchen sink can lead to real problems, like a weakened roof or rotten floorboards. A burst pipe can even damage your furniture and other personal possessions.
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