Analysis brought to youby the experts at FC&S Online, the unquestioned authority oninsurance coverage interpretation and analysis for the P&Cindustry. To find out more — or to have YOUR coverage questionanswered — visit the National Underwriter website, orcontact the editors viaTwitter: @FCSbulletins.

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Question: Regarding the the ISOFlood Coverage Endorsement Form, CP 00 10 10 12,does the form intend to cover water under the groundsurface pressing on, or flowing or seeping through foundations,walls, floors or paved surfaces, basements, doors, windows or otheropenings? In other words, is it picking up that which would beexcluded on the CP 10 30 10 12 exclusion g.water (4)? 

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— MinnesotaSubscriber

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Related: Water, water everywhere: Flood claim questionsanswered

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Answer: The coverage provided under CP 10 65does not cover everything that is excluded under g. Water (4) of CP10 30 10 12. The flood coverage endorsement does notprovide coverage for water under the ground that seeps throughdoors, windows or other openings. Also, under the definition forWater damage in CP 10 30, it specifically states that… “there is nocoverage for loss or damage caused by or related to weather-inducedflooding which follows or is exacerbated by pipe breakage orcracking attributable to wear and tear.” There is no coverageprovision within CP 10 65 that would provide coverage for this typeof situation.

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Since there is no definition of 'flood' in either of theseforms, the courts would rely on the standard definition. Inrelation to your question, Merriam Webster defines flood as:

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1. The rising and overflowing of a body of water especially ontonormally dry land; a condition of overflowing;

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2. The flowing in of the tide…

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With respect to general flooding, coverage is for water thathas overflowed its confines. Therefore, the water that enters inbelow the lowest basement floor or the subsurface of the groundshould be covered.

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Question: We have a waterdamage claim on a hazard policy caused by a sewer backup due to excessive flooding in the area. Is the damage from thesewer water covered?

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The policy is an HO policy with the followinglanguage: 

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Exception to C.(6)

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Unless the loss is otherwise excluded, we cover loss toproperty covered under Coverage A or B resulting from an accidentaldischarge or overflow of water or steam from within a: (1) drain,or water, steam or sewer pipe, of the “residencepremises”….

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Section 1 – Exclusions

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3.  Water means: Flood, surface water,waves, including tidal wave and tsunami, tides, tidal water,overflow of any body of water, or spray from any of these, allwhether or not driven by wind, including storm surge;  andwater that:

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          • Backs up through sewers or drains; or
          • Overflows or is otherwise discharged from a sump, sump pumpor related equipment.

— TexasSubscriber

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Answer: The exception to C.(6) is for theoverflow or accidental discharge of water from a sewer pipe off theresidence premises. Therefore, you have an issue of fact; did theoff premises sewer pipe cause the loss, or was the loss caused dueto the pipes on the premises? Note that the water exclusions forsurface water and water below the surface of the ground do notapply to loss under C.(5) or (6). Recall that 5 relates to mold or fungus hidden behind walls, ceilings orfloors.

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However, water that backs up through sewers or drains is clearlyexcluded, as is flooding. The insured would need to have added theWater Back-up and Sump Discharge or Overflow endorsement HO 04 95in order to have coverage.

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Related: Court rules on meaning of homeowner's water'leakage' insurance

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Question: Insured has a standardpersonal auto policy. Insured is driving withhis girlfriend (also a named insured on the policy). The weatherconditions were poor and very heavy rains flooded the road thecouple was driving on. The vehicle was swept away down the road inthe flood water. Both the driver and the passenger escaped thevehicle. The passenger escaped but the driver drowned in the floodwater. Is there bodily injury coverage available to the insureddriver or passenger? The cause of death was due to drowning, notdue to a motor vehicle accident, so it does not appear thatcoverage is triggered.

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— MarylandSubscriber

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Answer: Generally a personal auto policy willstate that in order to trigger coverage the insured has to belegally liable for bodily injury that is causedby an auto accident. Here there is no obvious liability claim,unless the insured-passenger can claim that the insured-driver wasnegligent when he drove down the flooded road. Although some courtshave considered water as an object within the meaning of collision,in this case we cannot definitively say that this would beconsidered an auto accident.

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Related: Is that claim covered?

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In Part B of the insuring agreement, Medical Payments Coverage,the standard policy says that the insurer “will pay reasonableexpenses incurred for necessary medical and funeral servicesbecause of 'bodily injury' caused by accident and sustained by an“insured.”  An accident in Part B is different from anaccident in Part A and requires only that the insured is injuredwhile occupying a motor vehicle designed for use on a public road.Because the insureds were escaping the vehicle at the time of thebodily injury and death, they were technically occupying thevehicle at the time of the injuries. Since the bodily injury anddeath in this case both occurred while the insureds were occupyinga motor vehicle designed for use on a public road, this isconsidered an accident under Part B, Medical Payments Coverage.Since the survivor in this case was an insured, any reasonablemedical expenses will be covered. Also, since the standard policyincludes coverage for funeral expenses, and because the driver wasalso an insured, the deceased driver's funeral services will alsobe covered.

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See also: 

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How false water-damage claims are reaching crisislevels in Florida

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Here's why some water damage claims aren'tcovered

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