A property insurance policy, no different than any insurance policy, contains exclusions for events that are NOT covered under the terms of the policy. One such common exclusion in a property insurance policy is an exclusion for damages caused by “constant or repeated seepage or leakage of water…over a period of 14 or more days.”
The application of this exclusion was discussed in the recent opinion of Hicks v. American Integrity Ins. Co. of Florida, 43 Fla. L. Weekly D446a (Fla. 5th DCA 2018). In this case, while the insured was out of town, the water line to his refrigerator started to leak. When the insured return home over a month later, the supply line was discharging almost a thousand gallons of water per day. The insured submitted a property insurance claim. The property insurer engaged a consultant that opined (likely, correctly) that the water line had been leaking for at least five weeks. Based on the above-mentioned exclusion, i.e., that water had been constantly leaking for over a period of 14 days, the insurer denied coverage. This denial led to the inevitable coverage dispute.
The trial court granted summary judgment in favor of the insurer in the insurance coverage lawsuit. The insured argued at trial and then on appeal that this exclusion only applies to losses caused by water on day 14 and after. For this reason, the insured attempted to calculate his water damage losses that occurred during the first 13 days of the supply line leaking. The appellate court agreed with the insured:
In light of the general principle that insurance policy provisions susceptible to more than one interpretation should be construed liberally in favor of the insured and strictly against an insurer, and that exclusionary clauses should be read even more narrowly, we hold that an insurance policy excluding losses caused by constant or repeated leakage or seepage over a period of fourteen days or more does not unambiguously exclude losses caused by leakage or seepage over a period of thirteen days or less. It is not unambiguously clear that a provision excluding losses caused by constant leakage of water over a period of fourteen or more days likewise excludes losses caused by constant leakage of water over a period of less than fourteen days. And ambiguous insurance provisions — those susceptible to more than one meaning, one providing coverage and the other denying it — must be construed against the insurer and in favor of coverage.
Hicks, supra (internal citations omitted).
This is a favorable ruling for an insured as it established coverage within the first 13 days of the water supply line leaking. The damages associated with that loss is a material issue of fact to be determined by the jury (or judge if it is a bench trial). But, importantly, the ruling established coverage under this exclusion, meaning the insurer could not categorically bar coverage because the leak constantly occurred for 14 or more days; rather, the insured’s damages, if any, would be limited to the first 13 days of the leak.
Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.