Every now and then, bizarre losses are reported in the news that start me wondering whether there is any insurance coverage for the poor souls suffering through a disaster. An article, "What One Homeowner Learned from 15,000 Gallons of Raw Sewage" points out just how illusory the hope of "full coverage" is under the modern all risk insurance policy.

The story delves right into the insurance coverage problem:

Joey Roche never set out to be a leading voice in educating homeowners on protecting their investment.

But in the more than two years since 15,000 gallons of raw sewage spewed into his newly purchased house in Oregon City, he’s ended up instructing more than a few people on how to steer clear of his own fate.

"Looking back, I, of all people, should have known better," Roche said. "I’m a licensed general contractor. So I figure if this could happen to me, it could happen to anyone."

He’s far from alone in assuming that the insurance policy he bought to protect his vintage 1940 house in the city’s historic Canemah neighborhood would cover any contingency.

In fact, it covered almost nothing. And even the $10,000 he collected from State Farm Insurance to pay to clean up the muck came through a previous purchase of a separate endorsement — an addition to his policy — that if not for his contractor’s background he might never have thought to ask about.

But whether it’s a freak sewage backup, flooding, landslide or earthquake, a majority of homeowners probably assume the insurance policy they’ve taken out to cover such contingencies will pay off in time of need, Roche and others say.

Often, that’s simply not the case.

"I get calls every single day from people who are outraged to find out that they simply aren’t covered for things they thought they were," said Ron Fredrickson, who manages the Oregon Insurance Division’s consumer advocacy unit. "In the end, unfortunately, there’s usually not much I can do for them."

I think that State Farm agents must get some of the best "how to be likeable" training in the insurance business. I say this because as I pointed out in Is the State Farm Policy Really Worth Anything? the policy they sell does not really offer broad coverage and after all those commercials suggesting that State Farm will be there for you after the disaster, it simply is not true. Joey Roche had State Farm coverage. He got paid a fraction of his loss, but he loves his agent who sold him the coverage.

"Roche praised his State Farm agent for making good on everything the policy provided.

"Unfortunately and to our ultimate chagrin," he added, "it just didn’t cover very much."

To be Fair And Balanced, standard homeowners forms, like most property forms in current use, exclude all loss "caused directly or indirectly by any of the following . . . water which backs up through sewers or drains or which overflows from a sump." Newer homeowners forms expand the exclusion to include "water-borne material which backs up through sewers and drains." It also adds "which overflows or is discharged." And, "a sump pump or related equipment" now accompanies a sump. The bottom line: most insurance companies only cover this occurrence under endorsements that offer little extra coverage.

In Rodin v. State Farm Fire & Casualty Co., 844 S.W.2d 537 (Mo. App. 1993) the insureds argued that damage done to their dwelling was caused by sewage, not by water. Tree roots in the outside sewer system caused sewage to back up into the homes of the Rodins and their neighbors. Rodin described the eight inches of effluent that entered his basement as an odorous, viscous, black liquid with solid matter floating in it. He added that the liquid definitely was not water. However, the court stated that the plaintiffs’ argument that the policy excluded only water damage overlooked the totality of the exclusion. The Court noted that the loss that would not have occurred in the absence of the water backing up through sewers or drains, regardless of other causes acting "concurrently . . . with the excluded event to produce the loss." Therefore, whether the loss was caused by water or pollutants contained in the sewage acting concurrently with water, it was excluded under State Farm’s policy.

What a stinking mess and unexpected uninsured event from the policyholder’s standpoint.