Florida Public Adjuster Mike Keeler’s 4th (and 6th ) (Not-So) Outstanding Tips on How to File a Water Leak & Water Damage Claim

As a follow-up to my LinkedIn post earlier today (June 8th) about my (not-so) favorite Florida public adjuster Mike Keeler's YouTube video on "How To Get Insurance To Pay For Water Damage" (https://lnkd.in/gxdrjsr4), I offer for your (and hopefully the Florida Office of Insurance Regulation's) continued astonishment, bemusement and educational disvalue, Mr. Keeler's No. 4 (and 6th) (Not-So) Outstanding Tip on How To File a Water Leak & Water Damage Claim (title page and background music added). 

Mike's full YouTube video of all six (not-so) outstanding tips is here: https://lnkd.in/gMeXVM4B.

Speechless.  Just speechless. 🤦

#publicadjusters #insurancefraudisbad #FLpropertyinsurancereform

Wind or Water? -- A Superstorm Sandy Loss

HOMEOWNERS – PROPERTY – FLOOD – WATER DAMAGE EXCLUSION – WIND – ANTI-CONCURRENT CAUSATION CLAUSE    
Clarke v. Travco Ins. Co.
(S.D.N.Y., decided 8/7/2015)

During Superstorm Sandy, water flooded the lower level of the plaintiff's house to a height of approximately four feet.  Further, a wooden dock from another property, approximately fifteen feet by ten feet in size, entered the property and came to rest within the lower level of the house, causing damage to the house.  Plaintiff asserted that the dock was pushed into the property by wind, causing significant structural damage, while defendant Travco Insurance Company argued that the dock was transported by water.

Plaintiff's policy with Travco contained the following exclusion:

1.  We do not cover any direct or indirect loss or damage caused by, resulting from, contributing to or aggravated by any of these excluded perils. Loss from any of these perils is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss. 

These exclusions apply whether or not the loss event:

(a) Results in widespread damage;
(b) Affects a substantial area; or
(c) Occurs gradually or suddenly.

These exclusions also apply whether or not the loss event arises from:

(a) Any acts of nature;
(b) Any human action or inaction;
(c) The forces of animals, plants or other living or dead organisms; or
(d) Any other natural or artificial process.

* * *

c. Water Damage, meaning:

(1) Flood, surface water, ground water, storm surge, waves, wave wash, tidal water, tsunami, seiche, overflow of a body of water, or spray from any of these, whether or not a result of precipitation or driven by wind;

(2) any water or water borne material that enters through or backs up from a sewer or drain, or which overflows from a sump, sump pump or related equipment, as a direct or indirect result of flood;

(3) any water or water borne material located below the surface of the ground including water or water borne material:

1. Which exerts pressure on, seeps, leaks or flows into:

a. Any part of the dwelling or other structures;
b. The foundation of the dwelling or other structures;
c. Any paved surface located on the "residence premises"; or
d. Any spa, hot tub, or swimming pool.

2. Which causes earth movement; or

(4) any overflow, release, migration or discharge of water in any manner from a dam, levee, dike, hurricane barrier or any water or flood control device.

Direct loss by fire, explosion or theft resulting from water damage will be covered.

After discovery was complete, Travco moved for summary judgment.  In GRANTING that motion and dismissing plaintiff's complaint, the District Court for the Southern District of New York first ruled that the report and testimony of plaintiff's professional engineer was inadmissible as expert testimony because his conclusion that the dock was wind-driven was "based on data, a methodology, or studies that are simply inadequate to support the conclusions reached." Secondly, after outlining the insurance policy interpretation principles that are used in New York, the District Court concluded that "[i]t is clear, by the plain and unambiguous language of the policy, that the damage does fall within the [water damage] exclusion, and therefore Plaintiff cannot prevail on his claim":

The facts of this case are essentially undisputed. A dock, floating on top of water, was pushed by wind into the lower level of Plaintiff's house, causing damage to the Property. Plaintiff seeks to differentiate damage to the Property caused by dock from damage caused by flood waters and avers that the damage done by the dock was caused solely by wind and therefore falls outside the provision excluding water damage from coverage under the Policy. (See Pl.'s Opp'n at 3, 4-5.) The Court is skeptical that this sort of differentiation is truly possible or supported by the record before it but, even if it is, the distinction does not defeat the provision of the Policy excluding coverage for water damage. 

The exclusion provision sets forth that the Policy does not cover "any direct or indirect loss or damage caused by, resulting from, contributing to or aggravated by any of these excluded perils." (Sipple Decl. Ex. B at TP 000010 (emphasis added).) The Policy then goes on to include an anti-concurrent causation clause which states that "[l]oss from any of these perils is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss." (Id. (emphasis added).) One of the "excluded perils" in the Policy is "Water Damage," which is defined in part as "flood, surface water, ground water, storm surge, waves, wave wash, tidal water, tsunami, seiche, overflow of a body of water, or spray from any of these, whether or not a result of precipitation or driven by wind." (Id. at TP 000011 (emphasis added).) These terms have a definite and precise meaning when read within the context of the agreement as a whole, in particular when read in conjunction with the various clauses regarding exclusions from the Policy. There is no ambiguity in the relevant portions of the Policy. 

The Policy unambiguously excludes any damage "caused by" or "aggravated by" the types of water described in the exclusion provision, regardless of any other contributing causes and whether or not it was "driven by wind." While it appears possible that the dock may have been driven into the Property by wind, as Plaintiff asserts, it is clear from the record that the dock was driven into the house because it had been floating on, and was also driven by, water. (Aboulafia Decl. Ex. 4 (Transcript of Deposition of Peter Svoboda, October 2, 2014 ("Svoboda Dep.")) at 80:20-81:14.) Even Costa—whose testimony was proffered by Plaintiff to rebut the claim that the damage involved water, as opposed to wind—testified to this in his deposition: 

Q: As you sit here today, based on what you observed is it your belief that this dock was actually lifted up into the air and blown into the house, or that it was pushed by the wind on top of water into the house?. . . .

A: Pushed on top of the water into the house. 

(Costa Dep. at 42:9-17; see also id. at 41:17-21, 45:9-46:9.) There is no dispute that water was involved in the dock's movement. Even if wind were the main cause, it is indisputable that the water upon which the dock was resting at least indirectly caused or aggravated the damage to Plaintiff's property. Further, the language of the anti-concurrent causation clause means that "where a loss results from multiple contributing causes, coverage is excluded if the insurer can demonstrate that any of the concurrent or contributing causes are excluded by the policy." ABI Asset Corp. v. Twin City Fire Ins. Co., No. 96-CV-2067 (AGS), 1997 WL 724568, at *2 (S.D.N.Y. Nov. 19, 1997) (emphasis in original). Ultimately, it is clear that even if wind was a contributing cause and/or the dock was in some way "driven by wind," the exclusion still applies and thus bars Plaintiff from recovering under the Policy for the damage to his property. 

Plaintiff has failed to identify any genuinely disputed issues of material fact as to whether the policy exclusion applies in this matter, which is the crux of the Plaintiff's entire claim. The unambiguous language of the policy exclusion for water damage clearly excludes the damage caused to Plaintiff's property as a matter of law, and a reasonable jury could not return a verdict in Plaintiff's favor. Thus, Defendant's motion for summary judgment is granted.

Water.  No coverage.  

Water Damage from Broken Water Main Not Due to "Explosion"

PROPERTY – HOMEOWNERS – WATER LOSS EXCLUSION – EXPLOSION EXCEPTION
Platek v. Town of Hamburg
(Ct. Apps., decided 2/19/2015)

A subsurface water main abutting the property of plaintiffs ruptured, causing water to flood into and severely damage their home's finished basement. Plaintiffs immediately made a claim under their homeowners' insurance policy with defendant Allstate Indemnity Company.
Plaintiff's homeowners policy with Allstate contained the following exclusion:

We not cover loss to the property ... consisting of or caused by:

4.  Water ... on or below the surface of the ground, regardless of its source[,] [including] water ... which exerts pressure on, or flows, seeps or leaks through any part of the residence premises.

We do cover sudden and accidental direct physical loss caused by fire, explosion or theft resulting from items 1 through 4 listed above. 

Allstate denied coverage under Exclusion 4, and plaintiffs commenced this action against the municipality and Allstate.  Plaintiffs moved for summary judgment on their breach of contract claim, asserting that because they had "sustained a water intrusion loss" caused by "an explosion of the ... water main," their claim fell within the exception to the water loss exclusion.  In support of their motion, plaintiffs submitted the affidavit of an engineer, who stated that the water main "suddenly exploded from the internal water pressure being exerted on the pipe walls. Hence, the explosion resulted from internally pressurized water that was supposed to be contained in a buried underground pipe." He opined that plaintiffs had therefore suffered "direct physical loss to their home and other property," which was "caused by an explosion resulting from internally pressurized water suddenly and accidentally bursting from the underground pipe."  Allstate cross-moved for summary judgment, arguing that the explosion exception did not apply because, under that provision's wording, any "loss caused by ... explosion" must "result[ ] from" the explosion. Allstate argued that in this case, by contrast, any explosion "occurred earlier, outside the residence premises, when the water main broke."

Supreme Court granted plaintiffs' motion and denied Allstate's cross motion, and declared that plaintiffs' loss was covered under the policy and Allstate was required to pay the claim. On Allstate's appeal, the Appellate Division, with two Justices dissenting in part, modified Supreme Court's order by vacating the declaration and otherwise affirmed. All the Justices agreed that since plaintiffs asserted a cause of action against Allstate for breach of contract, Supreme Court erred by "declaring" that plaintiffs' claimed loss was covered under the policy and directing payment. The Court split on the issue of whether the policy's sudden and accidental exception to the water loss exclusion applied.

In REVERSING the Appellate Division's denial of Allstate's cross motion for summary judgment, the Court of Appeals first reviewed the "three basic principles" of insurance policy interpretation guiding its analysis in this case:

1. In determining an insurance coverage dispute the court first looks to policy language, construing the policy in a such way that affords a fair meaning to all of the language employed by the parties in the contract and leaves no provision without force and effect.


2. Although the insurer has the burden of proving the applicability of a policy exclusion it is the insured's burden to establish the existence of coverage, which includes demonstrating the applicability of an exception to a policy exclusion.


3. Where a property insurance policy contains an exclusion with an exception for ensuing loss, courts should assure that the exception does not supersede the exclusion by disallowing coverage for ensuing loss directly related to the original excluded risk.

After holding that the plaintiffs' loss clearly fell within the policy's water loss exclusion, the court rejected the plaintiffs' argument that explosion exception applied, holding:

Plaintiffs nonetheless argue that the water damage to their basement was covered because it was "caused by an explosion of the ... water main resulting from highly pressurized water located on or below the surface of the ground," or, as stated slightly differently elsewhere in their brief, that "the explosion occurred as a result of water that was exerting pressure on the Property" or "the Residence." But this is not what plaintiffs' expert said. He opined that "highly pressurized water" exerted internal water pressure on the walls of a pipe buried off plaintiffs' property, not that an explosion resulted from subsurface water "exert[ing] pressure on . . . any part of the residence premises" per item 4 of the water loss exclusion.

* * * * *

In sum, interpreting the insurance policy as plaintiffs propose would contravene the water loss exclusion's purpose, as expressed in unambiguous language, which is to preclude coverage for damages caused by the entry of water onto an insured's property. As stated by the Supreme Court of New Hampshire when interpreting a policy excluding water loss, "[t]o apply the ensuing loss provision to provide coverage for what is essentially a flood would subvert the intent of the parties" (Bates v Phenix Mut. Fire Ins. Co., 156 NH 719, 723, 943 A2d 750, 754 [2008] [internal quotation marks omitted]). In the same way, permitting coverage under the facts of this case would force Allstate to insure a loss it did not contemplate and, indeed, affirmatively excluded.

What the Archimedes' Principle and Empty In-Ground Swimming Pools Have to Do With Insurance Coverage

HOMEOWNERS – PROPERTY – IN-GROUND SWIMMING POOL – PRESSURE OR WEIGHT OF WATER EXCLUSION – EFFICIENT CAUSE OF LOSS
Gravino v. Allstate Ins. Co.
(4th Dept., decided 5/7/2010)

The street streaking, "Eureka!" shrieking Archimedes of Syracuse (Greece, not New York) reportedly discovered the principle of bouyancy while taking a bath and trying to figure out a way to determine whether King Hiero II's goldsmith had made the king's new laurel wreath crown from solid gold or had dishonestly added silver to it:

Any object, wholly or partially immersed in a fluid, is buoyed up by a force equal to the weight of the fluid displaced by the object.

Hydrostatic pressure is the pressure exerted by a fluid at equilibrium due to the force of gravity.

When an in-ground swimming pool is full of water, it exerts a force downwards due to gravity (weight) that is greater than that of the hydrostatic pressure, if there is any, that is exerted upwards on it by the water table.  When that pool is emptied, however, the force exerted downwards by the pool is less.  If the water table is lower than the bottom of the pool, no hydrostatic pressure exists and the pool does not move.  If the water table is higher than the bottom of the pool and the point at which the empty pool's weight equals the water table's hydrostatic pressure, however, the empty pool becomes buoyant and the pool "pops". 

That's what must have happened to the Gravinos' in-ground swimming pool, and they made a claim to their homeowners insurer, Allstate, for the damage to the pool's concrete that occurred when one end of the pool lifted out of the ground.  Plaintiff had drained his pool in June to paint it, but the painting was delayed due to rain.  Five days later, the Gravinos witnessed Archimedes' principle in action.  Allstate denied coverage for the damage based on, among other things, a policy provision in the policy excluding damage to a swimming pool caused by "pressure or weight of water."

Plaintiffs sued and the parties moved and cross-moved for summary judgment.  Erie County Supreme Court (Donna M. Siwek, J.) denied Allstate's motion and granted plaintiffs' cross motion.  On Allstate's appeal, the Appellate Division, Fourth Department unanimously REVERSED the order/judgment and vacated Supreme Court's declaration in favor of the plaintiffs, noting that since this was a breach of contract and not a declaratory judgment action, the court should have dismissed plaintiffs' complaint.

Finding that the efficient or dominant cause of the loss of the pool damage was excluded hydrostatic pressure, the Fourth Department held:

Defendant met its initial burden on its motion by establishing as a matter of law that the exclusion for damages caused by "pressure or weight of water" upon which defendant relied unambiguously applied to plaintiff's loss, and plaintiff failed to raise a triable issue of fact in opposition (see generally Zuckerman v City of New York, 49 NY2d 557, 562). The experts for each party agreed that the pool had lifted from the ground because of the hydrostatic pressure in the soil surrounding the pool. The fact that plaintiff's expert stated in his affidavit that the damage would not have occurred if plaintiff had not emptied the pool does not remove the loss from the policy exclusion. The policy expressly provides that, where the damage has two or more causes, the loss is not covered if the "predominant cause(s) of loss is (are) excluded" under the policy. Here, "[t]o determine causation, [we must] look[] to the efficient or dominant cause of the loss', not the event that merely set the stage for that later event' " (Kosich v Metropolitan Prop. & Cas. Ins. Co., 214 AD2d 992, lv denied 86 NY2d 707). Here, although the drainage of the pool may have been a precondition to the lifting of the pool from the ground, we conclude that defendant established as a matter of law that the groundwater pressure was the "predominant cause" of the loss, thus rendering applicable the policy exclusion for damages caused by "pressure or weight of water" (see Jahier v Liberty Mut. Group, 64 AD3d 683, 685).  

This blawg's discussion of the Javier v. Liberty Mut. Group case is here.

Water weighs 8.35 pounds per gallon, so the water in a 20,000-gallon swimming pool would weigh 167,000 pounds or 83.5 tons.  Remove that weight, add five days of rain to the water table beneath a pool, and cry "Eureka!" if it pops.  Just don't expect your homeowners insurer to cover any resulting damage if your policy contains an exclusion identical or similar to the ones in this or the Javier case.

Water Damage Exclusion Held to Apply to In-Ground Swimming Pool Damage

HOMEOWNERS – PROPERTY – IN-GROUND SWIMMING POOL – WATER DAMAGE EXCLUSION
Jahier v. Liberty Mut. Group
(2nd Dept., decided 7/21/2009)

First Liberty Insurance Corporation insured the plaintiffs under a Deluxe Homeowners Insurance Policy.  In April 2007, the plaintiffs' in-ground swimming pool, the surrounding patio area, and the plumbing which serviced the pool sustained damage when the pool lifted up several inches out of the ground. At the time of the loss, the pool was not filled with water, as it had been drained by a contractor hired by the plaintiffs to perform maintenance work. During the time that the pool was empty, and shortly before the plaintiffs discovered the damage, heavy rains had fallen in the area. The plaintiffs made a claim under their policy, but Liberty disclaimed coverage based the policy's "Earth Movement" and "Water Damage"exclusions.

Then water damage exclusion negated coverage for loss caused "directly or indirectly" by "[w]ater damage, meaning . . . [w]ater below the surface of the ground, including water which exerts pressure on ... a building ... swimming pool or other structure ... regardless of any other cause or event contributing concurrently or in any sequence to the loss."

Plaintiffs sued Liberty for breach of contract and a declaration of coverage.  Suffolk County Supreme Court denied Liberty's motion and granted plaintiffs' cross motion for summary judgment, and Liberty appealed.  In REVERSING the motion court and granting summary judgment to Liberty, the Second Department held:

Liberty met its initial burden of establishing its entitlement to judgment as a matter of law by demonstrating that the "water damage" exclusion clearly and unambiguously applied to the plaintiffs' loss (see Reynolds v Standard Fire Ins. Co., 221 AD2d 616; Hipper v CNA Ins. Co., 2002 NY Slip Op 40109[U] [App Tm 9th & 10th Dists 2002]; see generally Cali v Merrimack Mut. Fire Ins. Co., 43 AD3d at 417; Sheehan v State Farm Fire & Cas. Co., 239 AD2d 486, 487; Kula v State Farm Fire & Cas. Co., 212 AD2d 16, 20). The plain language of the exclusion relieves Liberty from loss caused "directly or indirectly" by "[w]ater damage, meaning . . . [w]ater below the surface of the ground, including water which exerts pressure on . . . a building . . . swimming pool or other structure." Furthermore, losses due to "water damage" are excluded "regardless of any other cause or event contributing concurrently or in any sequence to the loss." Here, the evidence demonstrated that the plaintiffs' loss was attributable to the subsurface water pressure that was exerted upon the empty swimming pool, even though it was precipitated by the drainage of the pool and heavy rainfall (see Cali v Merrimack Mut. Fire Ins. Co., 43 AD3d at 417-418; Sheehan v State Farm Fire & Cas. Co., 239 AD2d at 487; Reynolds v Standard Fire Ins. Co., 221 AD2d 616, 616-617; Kula v State Farm Fire & Cas. Co., 212 AD2d at 20-21; Hipper v CNA Ins. Co., 2002 NY Slip Op 40109[U] [App Tm 9th & 10th Dists 2002]; South Carolina Farm Bureau Mut. Ins. Co. v Durham, 380 SC 506, 671 SE2d 610). In opposition to Liberty's motion and in support of its cross motion for summary judgment, the plaintiffs failed to raise a triable issue of fact or establish their prima facie entitlement to judgment as a matter of law, respectively, so as to preclude the award of summary judgment to Liberty (see Zuckerman v City of New York, 49 NY2d 557, 562).

Court Finds Question of Fact on Coverage for Sinkhole Collapse

SPECIAL MULTI-PERIL POLICY – WATER DAMAGE EXCLUSION – SINKHOLE COLLAPSE – EFFICIENT PROXIMATE CAUSE
Simmons v. Dryden Mut. Ins. Co.
(Sup. Ct., Rensselaer Co., decided 1/21/2009)

Would you know a sinkhole if your house fell into one? 

Plaintiffs owned a rental property in Rensselaer, New York.  A nearby city water main ruptured, leaking very large quantities of water into the subsurface soils around plaintiffs' property. The massive amount of water caused a large area of ground to collapse into what the court thought "would likely be considered by most people to constitute a sinkhole."  The erosion and "sinkhole" undermined the foundation of the house causing a portion of the foundation to collapse. The water also infiltrated plaintiffs' basement causing significant water damage.

Plaintiffs had a special multi-peril policy with Dryden Mutual which afforded named or enumerated perils property coverage, not all-risk coverage.  The subject policy provided insurance coverage only for losses caused by fire or lightning, removal, explosion, windstorm or hail, riot or civil commotion, aircraft, vehicles, smoke, vandalism, sinkhole collapse and volcanic action. The relevant policy form also contained an exclusion for water damage caused by flood, surface water, waves, tides, tidal water or overflow of a body of water, water which backs up through sewers or drains, and water below the surface of the ground pressing on or flowing or seeping through foundations or basements. Shortly after plaintiffs notified Dryden Mutual of their loss, it disclaimed coverage on the ground that water damage was excluded by the policy.

Plaintiffs commenced this breach of contract action, and both parties moved for summary judgment.  In DENYING both motions, Rensselaer County Supreme Court Justice Michael Lynch held:

(1)  the water damage exclusion did not apply because that exclusion has been held to exclude only damage from natural causes or phenomenon, and not damage caused by defective municipal water supply systems; 

(2)  the policy was ambiguous as to coverage for "sinkhole collapse"; the policy definition required a subterranean void caused by the action of water on a limestone or similar rock formation; it did not limit covered sinkholes to natural phenomena or the action of water to chemical dissolution; Dryden's geologist did not offer any opinion as to where the earth that washed away went, did not state how deep the bedrock or other rock formations that were beneath the subject property, and did not exclude the possibility that the water released from the city water system was sufficient to physically create a subterranean void within or upon a rock formation allowing the supporting earth to collapse into such void;

(3)  partial summary judgment was granted to Dryden Mutual, dismissing plaintiffs' claims for damages to the property's driveway, trees, shrubs, plants and lawn, which were not not covered; and 

(4)  the affidavit of plaintiffs' construction engineering expert failed to set forth all of the facts upon which the expert's opinions were  based and, therefore, was without probative value; moreover, it failed to address or exclude a likely cause of the collapse and was "excessively conclusory".