Drain

The term drain appears twice in the policy but only once regarding a water leak. The first reference is in the water exclusion under "(3) Water that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment;" and the second reference is regarding water or other liquid escaping from pipes due to freezing, unless the equipment is drained of the liquid which is not related to our issue.

Backup, Overflow, Discharge

Backup

The term backup is used only once, again in the water exclusion "(3) Water that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment;".

Overflow

Overflow is referenced in the water exclusion twice; first in section (1): "(1) Flood, surface water, waves (including tidal wave and tsunami), tides, tidal water, overflow of any body of water, or spray from any of these, all whether or not driven by wind (including storm surge);" and again under "(3) Water that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment;".

Discharge

Discharge is used more than any other of these terms, appearing a total of ten times. However, not all mentions relate to the water issue. Some refer to animal discharge and others to pollution. First, it appears in the exclusion "(3) Water that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment;" and then in the exception to the exclusion for a defect in a system from which water escapes, unless that damage "results in discharge of any substance from an automatic fire protection system".

The remaining references are part of the water damage definition that is part of the "specified causes of loss" definition. Under sections (1) and (2) "c.(1) Accidental discharge or leakage of water or steam as the direct result of the breaking apart or cracking of a plumbing, heating, air conditioning or other system or appliance (other than a sump system including its related equipment and parts), that is located on the described premises and contains water or steam;" and "(2) Accidental discharge or leakage of water or waterborne material as the direct result of the breaking apart or cracking of a water or sewer pipe caused by wear and tear, when the pipe is located off the described premises and is connected to or is part of a potable water supply system or sanitary sewer system operated by a public or private utility service provider pursuant to authority granted by the state or governmental subdivision where the described premises are located."

Later in the description it states that "Therefore, for example, there is no coverage under this policy in the situation in which discharge or leakage of water results from the breaking apart or cracking of a pipe which was caused by or related to weather-induced flooding, even if wear and tear contributed to the breakage or cracking."

There is a final clarification for discharge and "specified cause of loss" as follows: "To the extent that accidental discharge or leakage of water falls within the criteria set forth in c.(1) or c.(2) of this definition of "specified causes of loss," such water is not subject to the provisions of the Water Exclusion which preclude coverage for surface water or water under the surface of the ground." Therefore, if a plumbing, air conditioning or other system or appliance that contains water or steam cracks or breaks, that discharge is water damage, as is the discharge from a broken or cracked water or sewer pipe caused by wear and tear if the pipe is located off the premises and connected to or part of a potable water or sewer system.

Equipment Analysis

Plumbing

When reviewing a claim situation it's critical to look at definitions and how terms are used within the policy; as stated earlier, undefined terms get the dictionary definition. Looking at the CP 10 30, the term plumbing is used in conjunction with heating, air conditioning, or other equipment, or the discharge of water for the breaking or cracking of plumbing, heating, air conditioning equipment, other systems or appliances (other than a sump) on the premises and containing water or steam. It is not used with the terms sewers or drains. So the policy is using plumbing to mean such things as water heaters, air conditioning and heating systems, and related equipment. Since plumbing is not defined by the policy the dictionary definition would prevail, and therefore toilets, sinks, and incoming water lines would be considered part of the plumbing system as a whole.

Sewer

The term sewer is used in the water exclusion in conjunction with overflow, backup, or otherwise discharged from a sewer, and then again in the definition of water damage, where it refers to accidental discharge or leakage of water as a result of a break or crack of a sewer pipe when the pipe is off-premises and connected to or part of potable water or sewer systems.

Therefore, if water backs up, overflows, or discharges from a sewer, there is no coverage. When a sewer pipe off-premises breaks or cracks and then discharges or leaks water into the premises, that is considered water damage.

Drain

A drain is in the same exclusionary section as backup, overflow, and sewer, so if water backs up or overflows from a drain, that is excluded by the language, "We will not pay for loss or damage caused directly or indirectly by any of the following… g.(3) water that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment." Again the dictionary defines drains as a means by which liquid outflows, so if lines that carry water away from the premises experience a backup, overflow, or discharge, there is no coverage.

Action of the Water Analysis

Backup

Now that we've looked at the equipment involved, let's look at the action of the water. Backup is used only in the water exclusion and relates to sewers and drains; so water that backs up through a sewer or drain is excluded.

Overflow

Overflow is used in the water exclusion but relates to flood, surface water, tides, tidal water, or spray, as well as a sewer, drain, and other equipment. This is the only reference to overflow in the policy, so only overflow of sewers, drains, sumps, sump pumps or related equipment is excluded. This leads us to the question is a sink, tub, or toilet related equipment to a sewer or drain? Merriam-Webster defines relate as: "to have relationship or connection" or "to show or establish logical or causal connection between". A sink, tub, or toilet all connect to a drain to get rid of used water, without that connection there is no way for the sink, tub, or toilet to properly perform its function. Therefore, they are related to sewers and drains, so if a sink, tub, or toilet overflows that is excluded. This was confirmed in Cardio Diagnostic Imaging, Inc. v. Farmers Ins. Exchange discussed in the article Holding Water – Definitions Needed to Understand Water Losses.

To demonstrate how important policy language is to determination of coverage, it is noted that some policies make the distinction that the exclusion applies only if the damage caused by water or other substances originates from somewhere other than the premises plumbing system. If this language is in the policy, it changes the exclusion and there is court precedent for providing coverage if the water damage originates from a sewer or drain located on the insured's premises.

Discharge

Discharge is again in the water exclusion along with overflow, sewer and drain, so any discharge from a sewer, drain or related equipment, which we have established includes sinks, tubs, or toilets, is excluded. It also plays a part in the definition of water damage, so that accidental discharge or leakage of water from plumbing, heating or air conditioning systems is considered water damage, as is water that leaks from a broken water or sewer pipe located off the premises and is connected to a water supply or sewer system. So if a pipe bringing water into the premises or taking water away from the premises breaks, the resulting damage is considered to be water damage. Then damage is excluded if the discharge from a pipe was caused by or related to weather-induced flooding, even if wear and tear is involved. For example, if the area floods and the drain from the bathroom sink breaks and backs up into the sink, there is no coverage.

Lastly, if the discharge falls within the "specified causes of loss", then the exclusion for surface water and water under the surface of the ground does not apply. "Specified causes of loss" is a defined term and includes a number of perils including water damage as well as fire, lightning, windstorm, hail, leakage from fire-extinguishing equipment, aircraft and vehicles, sinkhole collapse, weight of ice, snow sleet, riot/civil commotion and volcanic action. Therefore, if a "specified cause of loss" leads to water damage as described, that damage is not subject to the exclusion for surface water or water under the surface of the ground. For example, if a sinkhole causes the side of a nearby pond to collapse, and the water discharges over the ground and damages the insured's property, that would be covered.

Our next article will walk through the terms as used in the standard homeowners form.

Holding Water – Definitions Needed to Understand Water Losses

Holding Water – Water Terms Used Within the Homeowners Policy

Holding Water – Cases Involving Backup, Overflow, and Discharge

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