YOU MAY NOT BE EXCLUDED FOR A WATER LEAK OCCURRING MORE THAN 14 DAYS
Many homeowner’s policies have an exclusion which generally states we do not insure for a loss caused by constant or repeated seepage or leakage of water over a period of 14 or more days. Other policies state that a loss won’t be covered if the seepage or leakage occurs over weeks, months or years.
If this has happened to you, don’t lose hope. You still may have coverage. Normally we always saw this clause as excluding coverage for the entire loss if the water was leaking for more than 14 days. So if, for example, you went away on a European vacation for three weeks and the water line to your clothes washer brakes. Generally, it was assumed that if this leak happened over a period of time, it would not be covered. However, a recent 5th District Appeals Court decision, Hicks v. American Integrity Ins. Co., ruled that if you can prove your loss for the first 13 days, the policy provides coverage for the first 13 days. In the Hicks case, the homeowner was out of town when the water supply line to his refrigerator began leaking. The leak was slow at first but steadily increased until it was discharging one thousand gallons per day when Mr. Hicks finally returned. Mr. Hicks filed a claim with his insurance carrier. The insurance company retained an expert who determined that the pipe had been leaking for five weeks or more so the insurance company denied the claim.
Mr. Hicks filed suit and the insurance company argued that this loss was not covered because the leak occurred for more than fourteen days. Mr. Hick’s filed a motion arguing, among other things, that the loss which occurred within the thirteen days was covered. Mr. Hicks obtained a report from a forensic general contractor who calculated the amount of damage to his home within the first thirteen days of the leak and estimated the damage at $40,926.77. Mr. Hick’s argued that the exclusion only applies to losses caused by water on day 14 and onward.
The Court considered this argument and held that an insurance policy excluding losses caused by leakage or seepage over a period of fourteen days or more does not unambiguously exclude losses caused by leakage or seepage over a period of thirteen days or less. Keep in mind that this was an all-risk policy, meaning once the insured establishes a loss within the terms of the policy, the burden then shifts to the insurer to prove that a particular loss arose from an excluded cause.
The Appeals Court directed the trial court to enter partial summary judgment in Mr. Hick’s favor on the issue of coverage for the first 13 days of the leak with the extent of the loss to be determined at trial. The insurance company would then have the burden to prove any loss that would have occurred after the first thirteen was in fact excluded and therefore not covered under the language of the policy.
Contrast this case with Hoey v. State Farm Fla. Ins. Co. case, 988 So.2d 99 which is a 4th District opinion. In that case, the home was damaged by a leaking water supply line from a toilet while the home was vacant. That policy stated the following:
- We do not insure for any loss to the property described in Coverage A which consists of or is directly and immediately caused by one or more of the perils listed in items a. through n. below, regardless of whether the loss occurs suddenly or gradually, involves isolated or widespread damage, arises from natural or external forces, or occurs as a result of any combination of these:
- continuous or repeated seepage or leakage of water of steam from a:
(3) plumbing system, including from, within or around any shower stall, shower bath, tub installation, or other plumbing fixture, including their walls or floors;
which occurs over a period of time . . .
The leak was discovered by a neighbor who saw the water flowing below the sliding glass door. An expert for the insurance company believed that the leak had been occurring for a period longer than a few weeks. Based on this, the trial court found that this leak was occurring over a period of time and the appellate court upheld the determination that the loss was excluded.
What this shows us is the policy language, the nature of the leak and the time frame of the leak are all important. Just because the insurance company denies your water leak claim doesn’t necessarily make the determination correct. If you have an all risk policy, you may be able to establish a loss within the first thirteen days and be awarded coverage for that loss. However, whether or not you are successful depends on your policy language and the facts of the loss. The case of Hicks v. American Integrity may be challenged but as for now, it is interesting law in the 5th Circuit. So if you have a water leak and have this exclusion or one like it, don’t just give up. Give us a call and we still may be able to get you coverage for part of the loss.