Sewage backup is damage public adjusters deal with more than I would like to admit. Without going into a lot of detail regarding the legal cases, (depending on the wording of the policy in question) if the backup is on the insured side of the property line or actually in a plumbing pipe on the premises, coverage for these losses should be covered under an all risk policy. Why all the litigation and confusion in the first place?  It would seem pretty basic that these losses would be covered as they clearly meet the insurance test of a sudden, accidental and an unintended event. A recent media story Home Flooded With Neighbors Sewage During Irma, regarding a client we represented highlights the problem.

Reading the history and evolution of property coverage, you will find that the genesis of the exclusions for sewer type losses resulted from the post War World II building boom in the northeast.  Communities such as Levittown, NY and others put a huge strain on very limited municipal sewage processing plant capacity. During a severe storm, sewage may back flow before the floodwaters over flow and enter the affected homes.  Just imagine the entire raw sewer in your communities’ lines being pushed back into the homes.  This is not an isolated event and will likely occur in many storm events.

These pumping and waste facilities simply could not keep up.  Sewage backups in these new developments were very common resulting in exclusions by insurance underwriters for this type of loss.  What followed were the legal cases and the court’s interpretation of policy language law based on the facts of each case.  And in others, some policy language that basically says that if the blockage is inside the property owner’s property line versus out in the street, coverage will be afforded. A 2013 Appellate Court case in Florida http://www.3dca.flcourts.org/Opinions/3D11-3277.pdf clearly illustrates the confusion surrounding insurance coverage for water and sewer losses in today’s all risk homeowners insurance policies. If you take the time to read this case, you will note this issue has been litigated not only in Florida but other states as well.  It seems the insurance industry either does not understand the issues or haven’t been following the case law as we continue to see water and sewer claims denied on a regular basis.

But what about raw sewage that backs up into homes, businesses, and communities as a result of severe flooding like the type that occurred during Harvey and Irma overwhelming of municipal sewer systems? I am sure many homeowners are being told that this was a flood and if they lack flood insurance coverage they are out of luck. Don’t take that as a final answer!  Report a sewer backup loss if the facts warrant it.

As I noted above, some homeowner’s insurance companies have policies with limited coverage for sewer backup in the additional coverage section of the property policy. This was probably added more for competitive reason than anything else. The standard coverage is typically very limited to $5,000, a woefully inadequate amount considering the damage the sewage or black water can cause to homes and their contents. 

So what should one do to protect from this devastating peril?  One way is to visit your insurance agent or broker and ask about increasing coverage limits or, if not covered, adding coverage.  Some of our Superstorm Sandy clients had the good fortune to have the top of the line property policy with companies that provide outstanding coverage both in dollar limits and perils insured.  One company that insured a number of our clients properties paid for the full loss to contents and structural damage (six figure settlements) under the sewer backup coverage which was in below grade living areas and had very limited NFIP coverage.

Another consideration is to speak with a contractor or plumber to see if a back flow valve can be added to your sewer line to prevent this type of loss. But also realize that in extreme events it may be impossible to keep the sewage and other hazard materials from entering your home as it may well flow like a river down your street.  

The take away from severe flooding that occurs during these storms is that it’s not just the wind and water you need to be concerned about. There are a number of other perils to consider when these storms impact our communities.  So be prepared, know your risk, and check your insurance coverage. Act now! 

If you have questions regarding any property insurance related issue caused by Hurricane Irma please call 800-321-4488 or contact a licensed Florida Public Adjuster to submit a question to one of our insurance claim experts.