Standard homeowners policy language excludes losses caused by water, however what is meant by this is not always clear. Water damage generally includes flood, sewer backup and seepage from water below ground. Despite these categories, disputes often arise regarding whether damages caused by water are covered.

An issue that frequently comes up is what constitutes a “flood” in a homeowner policy exclusion. Courts have generally agreed that river overflow caused by heavy rains is what is meant by the term “flood” in an insurance contract.1 Also, water propelled by wind or another similar force can be generally considered flood, however other factors may play into whether this type of water damage will be excluded as flood.

For artificial sources, courts tend not to define water damage as flood. For example, some courts have held that a burst pipe or water main does not constitute flood damage.2 Courts in these instances have found the policy language ambiguous, finding that the insureds would likely interpret the term flood in its connotation as a natural event or body of water. Similarly, where insurance companies claim burst pipes and leaks to be excluded as resulting from “pressure, seepage and leaks,” some courts have found this language to be ambiguous and allowed for coverage.3

Just because your insurance company denies coverage based on a policy exclusion, does not mean they are correct in their coverage analysis. Often, insurance companies will immediately deny any form of water damage as excluded under the flood provision only to have these denials overturned by the courts. As always, in such instances it’s a good idea to discuss the matter with a professional before conceding to the insurance company’s interpretation.

1 4 Law and Prac. of Ins. Coverage Litig. § 50:3.
2 Popkin v. Security Mut. Ins. Co. of New York, 48 A.D.2d 46, 367 N.Y.S.2d 492 (1975).
3 Mellon v. Hingham Mut. Fire Ins. Co., 19 Mass. App. Ct. 933, 472 N.E.2d 674 (1984).

  • We had a recent intermediate appellate level case in New Jersey arising out of water damage from a burst pipe, where the insured’s policy expressly provided coverage for, ” Accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning or automatic fire protection sprinkler system or from a household appliance….”

  • Bill Wilson

    “ISO-standard” homeowners policies exclude far more than “flood” damage. The general exclusion is for “Water Damage” of various types, especially “surface water.”

    “[N]atural precipitation coming on and passing over the surface of the ground….”

    “Surface waters are commonly understood to be waters on the surface of the ground, usually created by rain or snow….”

    “’Surface’ water may be defined as water on the surface of the ground….”

    “Surface waters are those falling upon, arising from, and naturally spreading over lands produced by rainfall, melting snow, or springs.”

    I’ve assisted independent insurance agents in overturning initial claim denials based on “surface water” on roofs and upper balconies of condo buildings. However, in 2000, ISO revised their language so that the exclusion applies not only to naturally occurring surface water accumulation:

    “This Exclusion…applies regardless of whether any of the above…is caused by an act of nature or is otherwise caused.”

    A notable exception is if a public water main bursts and “floods” the premises…that’s covered.