Many property insurance policies have a provision that states something similar to the following: “we do not insure…for loss…caused by…constant or repeated seepage or leakage of water…over a period of 14 or more days.” Insureds may find their claims for water loss under their homeowners’ policy denied on the grounds that the leak was present for a period of two weeks or more. However, Florida courts have ruled that the first thirteen days of damage may be covered, due to ambiguity in the language of the policy.
In Hicks v. American Integrity Insurance Company,1 the court ruled that the policy language did not preclude coverage for damage caused during the first thirteen days of a leak. In Hicks, the insured was out of town when the leak occurred, and he did not discover it until he returned to the property weeks later. He filed a claim under his “all-risks” policy with American Integrity Insurance Company of Florida (“American Integrity”), but his claim was denied based on American Integrity’s expert opinion that the leak had been present for five weeks or more. The insured sued American Integrity for breach of contract. The insured provided a report prepared by a forensic general contractor that reflected the amount of damage that was believed to have been caused within the first thirteen days of the leak. The trial court ruled in favor of American Integrity, stating to the insured, “basically, you’re asking [this court] to say whether the policy covered the loss in the first 13 days…It might, but I’m not so sure that the time frame of these particular facts would allow for that determination.”2
The insured appealed the trial court’s determination, and the appellate court reversed, stating that an insurance policy excluding losses caused by constant or repeated leakage or seepage over a period of fourteen days of more did, “not unambiguously exclude losses caused by leakage or seepage over a period of thirteen days or less.” Since ambiguous language in insurance policies is interpreted in the light most favorable to the insured, it must be interpreted in favor of coverage for the loss. The appellate court further remarked that once an insured demonstrates that a loss is within the policy terms, the burden shifts to the insurer to prove that a loss arose from an excluded cause.3
The appellate court instructed the trial court to enter partial summary judgment in favor of the insured on the sole issue of coverage within the first thirteen days of the leak, with the extent of the damage to be determined at trial. The appellate court also determined that for damage occurring after the first thirteen days, the burden was placed on American Integrity to prove that specific damage was sustained after the thirteenth day, and therefore excluded by the language of the policy.
Similar determinations have been reached in factually similar cases. Insureds should read their policies carefully, as a denial for a loss may not be proper.
1 Hicks v. American Integrity Ins. Co., No. 5D17-1282 (Fla. 5th DCA Feb. 23, 2018).
2 Id. at 3.
3 Id. at 4.