HO3 Claim Question

[Todd Payne]

Good to know. What did they classify the loss as, or what was it paid under? Did Travelers give you any explanation as to why it was covered? I have a client that asked the same hypothetical question and wasn't sure of the answer.

 

[robb01]

Glad they had coverage. Did the client have water/sewer backup on thier policy?

 

[JCK818]

I couldn't get a straight answer out of the adjuster. Not 100% sure what he paid them under. Kept dodging my questions (in a nice way). Didn't want to press my luck.

 

[ECP]

I have been adjusting property claims for 7 years for various large insurance carriers.

HO3 does not cover water backup from a sump pump or drain. You must obtain an additional endorsement for coverage to apply to a water backup loss. Even still the endorsement typically limits the amount of coverage for this type of loss to $5K or $10K.
This is taken from the HO3 10/00 policy:
SECTION I – EXCLUSIONS
3. Water Damage
Water Damage means:
a. Flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind;
b. Water or water-borne material which backs up through sewers or drains or which over-flows or is discharged from a sump, sump pump or related equipment; or
c. Water or water-borne material below the surface of the ground, including water which exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structure;

As for the question about flood versus surface water. It does not matter if an event is classified as a flood or water accumulated outside your home and found a way in. Water that originates outside of the premise and enters whether it be through a window well, foundation, or seepage through a basement wall is not covered. Flood insurance is the only type of policy for personal lines, as far as I know, that covers water damage caused by ground or surface water. I have seen in some cases where insurance carriers will cover water that accumulates on a raised deck. This is not usually considered surface water or flood as it did not originate on the ground.