Over a year ago, I wrote a blog about pipe leaks explaining that most policies only extend coverage for “sudden and accidental” discharge or overflow of water from a plumbing system. I frequently get calls from policyholders and public adjusters with questions about water loss claims caused by broken pipes. There is still quite a bit of confusion about what constitutes a "sudden and accidental" discharge versus "repeated seepage and leakage." With respect to the latter, some policies use the term "a period of time" to qualify what is meant by constant or repeated discharge. Other policies are more clear and actually state that a repeated discharge as occurring over the course of a week or longer.
Earlier this year, a California appellate court weighed in on the above. In Brown v. Mid-Century Insurance Company,1 the court affirmed summary judgment for the insurer in a case concerning a pipe leak. In that case, there was competing testimony from plumbing experts retained by the policyholder and insurer. The central issue was whether the release of water from the broken pipe was "sudden" or occurred over "a period of time." The policyholder’s expert opined that the subject pipe "burst suddenly–in a nano-second, spraying water in the crawlspace." The court was not persuaded and found that it did not change the fact that the release of water–even by the policyholder’s own account–had occurred over a period of a month or two.2
The court in Brown went on to discuss the meaning of "sudden" and determined that "whatever ‘sudden’ means, it does not mean gradual."3 I know…not all that helpful. In citing another case, "sudden" was described as conveying a "temporal meaning of immediacy, quickness or abruptness." The court provided better guidance by giving examples of a sudden discharge of water–"a dishwasher hose breaking in mid-cycle, a water heater giving out a flooding a room, or an overflowing toilet."4 The court also addressed the argument raised by the policyholder that the policy’s use of the term "a period of time" was ambiguous and could not be understood. The court found that although "a period of time" was not defined in the policy, it was not ambiguous, holding that an "average layperson understands generally what ‘a period of time’ is, and understands that for water escaping from a pipe, ‘one to two months’ qualifies.”5
The takeaway from Brown is when analyzing coverage for water damage from a broken pipe, it is important to key in on the manner by which the water is discharged or released. Determining if the discharge is "sudden" is not necessarily easy. Not all cases are alike. It is always a good idea to consult with an insurance professional if things are not particularly clear.
1 Brown v. Mid-Century Insurance Co. (2013) 215 Cal. App. 4th 841.
2 Id. at 852.
3 Id. at 853.
4 Id. at 853.
5 Id. at 858.