As property owners continue to assess damage in the aftermath of Sandy, questions will arise as to what is covered under their insurance policies. The title of this article is actually a common predicament that some policyholders are finding themselves in. I recently talked with an experienced insurance agent/broker who had several clients facing the issue of who pays for the removal of debris that is not owned by them but it is located on their property following this storm.

The answer to the question is in the law. It depends on the facts of the situation and what coverages are applicable at the time of the loss. The Standard Flood Insurance Policy (SFIP), authorized under the National Flood Insurance Act, often does not define the term “insured property,” but does define “dwelling” and lists the property address:

Debris Removal, covers expenses incurred “as a result of removing debris of, on or from the insured property so long as the debris problem was directly caused by a flood.” Under Coverage C, coverage includes:

A. Non owned debris from beyond the boundaries of the described premises which is physically on the insured property.

B. Parts of the insured property which is anywhere:

1. On the described premises; and

2. On property beyond the boundaries of the described premises.

The SFIP generally excludes land from coverage. If the non-owned debris is located in or on the dwelling, then it is a pretty straight-forward case for coverage. However, the question may arise whether the terminology of the SFIP is ambiguous regarding coverage for removal of non-owned debris that is not on or in the dwelling, but is otherwise on the insured property. This may be one of the types of issues that emerge in litigation following Sandy.

Some policyholders may have excess flood insurance coverage. This means they have flood coverage by a carrier that is an excess layer beyond the SFIP or other primary flood coverage. These policies may have different wording than the SFIP. Some may not have any restriction for the debris, while others may exclude debris removal altogether.

A Policyholder facing this predicament should consult with an experienced insurance professional who can review the policies and offer some coverage feedback for their particular situation. As we often find in first-party property insurance cases, they are all about the facts.