A while back, I blogged about whether damage caused by a leaky pipe is a covered loss. Because it is the holidays, families and friends gather, and if by chance plumbing comes up as a dinner topic (I hope it does not), I will focus on another everyday plumbing misfortune…the toilet overflow.
When is water damage from a toilet overflow a covered loss? This very issue was reviewed and decided by a California appellate court last week. In the case of Cardio Diagnostic Imaging, Inc. v. Farmers Insurance Exchange,1 the insurance policy issued to the policyholder included a water exclusion that excludes damages caused by “Water that backs up or overflows from a sewer, drain or sump.” The question was whether this exclusion applied to damage caused by a malfunctioning toilet that failed to shut off the intake of water, and because there was a blockage in the sewer line, a toilet overflowed, causing water to leak into the premises. Each party moved for summary adjudication based on the exclusion. Both the trial and appellate court determined that the language of the exclusion was unambiguous on its face and the loss was not covered. One of the principal arguments of the policyholder was that since water overflowed from a toilet rather than a drain then the exclusion does not apply. The court disagreed and reasoned that the toilet was attached to a drain and ordinarily, water that enter the toilet flow through the drain into pipes that lead to the sewer system. Important to the court was the undisputed evidence that the blockage that caused the overflow was in the pipes, about 20 to 40 feet from the toilet. The fact that the toilet may have been defective was not material to the court given the location of the blockage. The court commented that had the blockage been in the toilet itself (before the drain), then it could have reached a different result.
As with all losses, it is important to study the insurance policy and ascertain whether exclusions apply. In the case of a toilet overflow, depending on the wording of any applicable water exclusions, it appears that the location of the blockage is key to deciding whether there is coverage.