Property & Casualty Insurance/Basement flooding

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Question
I live in Illinois and I have State Farm Insurance.  During a recent rainstorm, our finished basement flooded with about an inch of water.  The carpet, padding, and baseboards were removed by a company.  There was no damage to any other personal belongings.

My homeowners policy contains additional "sewer and drain" coverage for which I pay an extra $245 per year and it covers up to "$10,000."

The water in the basement came through the floor around the perimeter and along cracks through the center of the floor.  We documented this through pictures.  Is this something that is covered even if the sump pump totally failed?

I am waiting for an adjustor to come in which could take several days. The person I talked to on the phone would not give me assurance that I will be covered.

Thank you.

Answer
Craig,

I am sorry to hear about your problem. I hate to be the bearer of bad news but you are out of luck on your homeowner's policy providing any coverage.

When rainwater hits the ground, it changes the character into "surface water or rising water" ... damage which is specifically excluded under the policy.

The "sewer back-up" endorsement provides coverage specifically for the situation where there is a blockage in the lines and sewage backs up into the house. (I have seen million dollar homes with 6" of sewage through-out the first floor. Not a pretty sight!)

If you had a flood policy in place, there has to be a general condition of flooding for it to activated and that requires at least 2 adjacent properties to have the same condition of flooding. Even if you had one, there are severe limitations on what is covered inside a basement. The carpet would not be one of those items unfortunately.

The only way that there would be any coverage would be if the storm itself created an opening in the building envelope and that was how the water entered. Imagine a hole in the roof. Just seeping in through cracks and the walls would not qualify.

Wish I could have given you a different answer but State Farm will be issuing you a formal denial stating the actual policy language and exclusion that applies.

Kevin Hromas
JD, EGA, RPA, PLCS, HCRI-R/C, CPIU, WIND® Umpire
Kevin Hromas & Associates
... A Division of US Insurance Information LLC
www.KevinHromas.com

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Kevin Hromas - JD, EGA, RPA, PLCS, WIND Umpire

Expertise

Insurance related issues for both commercial and residential property coverage. I am a licensed, executive general adjuster currently holding a Texas resident P&C license (614250), New Mexico non-resident all lines license (248774), Oklahoma non-resident P/F/M license (A299561), Florida non-resident P&C license (E117051) and a National Flood Insurance Program certification (06040100). My areas of expertise involve property and casualty issues in both residential and commercial policies with regards to claims practices and issues. I deal extensively with Lloyd's of London commercial policies and various domestic carriers for residential policies.

Experience

I am a licensed, executive general adjuster currently holding a Texas resident P&C license (614250), New Mexico non-resident all lines license (248774), Oklahoma non-resident P/F/M license (A299561), Florida non-resident P&C license (E117051) and a National Flood Insurance Program certification (06040100). My areas of expertise involve property and casualty issues in both residential and commercial policies with regards to claims practices and issues. I deal extensively with Lloyd's of London commercial policies and various domestic carriers for residential policies. After a 20 year career as a General Contractor, I was employed by Allstate Insurance as an adjuster in Texas, holding various postitions within the property claims department. After leaving Allstate, I specialized in handling losses associated with major catastrophes through-out the country. (Hurricanes Isabel, Charlie, Wilma, Katrina, Ike, etc., hail storms, floods.) I am currently retained as an expert by multiple insurance defense firms in Texas for issues in litigation in regards to claims issues and practices. I am also a certified Umpire for formal appraisals.

Organizations
Member - Society of Registered Professional Adjusters Fellow - Council on Litigation Management Member - Property and Casualty Association Member - Texas Independent Insurances Adjusters Association Member - National Association of Independent Insurance Adjusters Member - Houston Claims Association Member – Windstorm Insurance Network Member – Association of Property & Casualty Claims Professionals

Publications
Claims Magazine (www.ClaimsMag.com and then search 'Kevin Hromas' for a full listing of articles and quotes.) www.ClaimsPages.com, www.ProAdjuster.org, www.KevinHromas.com

Education/Credentials
JD - University of Houston Law Center - 1992 BA - Southwest Texas State University - 1980 AA - South Plains College - 1977 PLCS - Personal Lines Coverage Specialist

Past/Present Clients
Certain Underwriters at Lloyd's of London, Fulbright & Jaworski (Law Firm) Bracket & Ellis (Law Firm) Thamm & O'Briant (Law Firm) Sheehy, Ware & Pappas (Law Firm) Walker, Wilcox and Matousek (Law Firm) Financial Guarantee Underwriters

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