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Last Post 03/17/2013 3:51 AM by  rickhans
Water leak below foundation
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FRED
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07/10/2012 10:33 AM

    A friend  has a Texas HOA Plus with endorsement HO470T. He had a water leak under the floor of his pier and beam dwelling causing damage to the finished wood flooring. The company denied the claim saying the leak was below the foundation. My question is where does the foundation of a pier and beam dwelling begin and end? Is there any case law on this? Does he have a chance in persuing this any further?

    Thanks

    Eddie

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    Leland
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    07/12/2012 12:31 AM
    Some policies exclude "underground" pipes. If the pipe is buried in the dirt under the house, the company may be willing to cover it, if it is buried in the "fill". This is defined as the dirt thrown back into the area under the house. The pipe might be below the surface of the dirt but above grade level, and therefore not technically "underground".

    It is also possible that the pipe itself could be excluded form coverage, but perhaps the ensuing damages would be.

    Consider this scenario: A NEIGHBOR has a pipe burst, and the water shoots through the air and hits your friend's house. Nobody would expect the Neighbor's pipe to be covered under your friend's policy, but your friend's damage would probably be covered. Policies often exclude airplanes, vehicles, pets, and boats, but routinely pay for the damage that airplanes, vehicles, pets, and boats cause.

    I couldn't find a copy of the HO470T on the internet, but I did read something that said water damage wasn't covered if the point of origin was underground or below the foundation/slab.

    Does your friend's policy say "underground pipes are excluded form coverage" or does it say "damage caused by underground pipes are excluded form coverage" ???

    Your friend's insurance company might have a rule to pay the loss when the pipe is in the "fill" and not buried so deep that it goes below the lowest pint of the foundation.

    I know of a case in California where the adjuster said no but the supervisor said yes because the pipe was in the "fill".

    I don't know of any case law. Let us know what happens.

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    ChuckDeaton
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    07/12/2012 10:36 PM
    The answer to this question is most likely held by the Texas Insurance Commissioner. File a complaint and see what happens!

    This is not a shot at Leland, but a California contributor commenting on a Texas loss! In my opinion Texas and California bear almost no resemblance in the Homeowners insurance arena.

    "Prattling on and on about being an ass with experience doesn't make someone experienced. It just makes you an ass." Rod Buvens, Pilot grunt
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    olderthendirt
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    07/13/2012 1:07 AM
    "In my opinion Texas and California bear almost no resemblance in the Homeowners insurance arena."


    Or any other arena.
    Life is like a sewer, what you get out of it depends on what you put in it
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    Leland
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    07/13/2012 2:46 AM
    Yeah, whatever. The "underground pipe" exclusion is not limited to Texas. Right after I posted this I had a file examiner grill me on the location of a leaking pipe for precisely this reason: was the leaking pipe in the basement in a position where it would have been underneath the dirt if there was no basement?

    Chuck- post the Texas endorsement language. Then I will find similar (or identical) language from a California policy.

    Then we will all be able to see if it makes sense for a California adjuster to comment on a Texas policy.

    One more thing: I have a Texas license but not California. So that makes me legally more qualified to opine on Texas policies. Plus I have Texas in my heart.

    Show us YOUR Texas license before you make anymore disparaging comments.

    Papers please!

    P.S. I am going to organize another TX license class in California. Come to LA tax deductible. Send me a private message if interested.

    P.P.S. Chuck, you can come if you promise not to disrupt the class. We will let you have a 15 minute show and tell of your electronic adjuster equipment.
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    ChuckDeaton
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    07/13/2012 9:59 AM
    As I said, no intent to take a cheap shot, but Texas has, in the past, had a problem with "foundation" claims. That is cracked foundations/slabs because of plastic soils. A sewer pipe leaks, the leak causes the soil to swell and the swelling cracks the slab on grade type foundation. When the state rewrote insurance policies after the "killer black mold" scare, coverage for foundation claims were addressed at the same time. Many of the dedicated foundation claims vendor closed their doors for a lack of business.

    A claims representative, working in Texas, could provide an answer more specific to the foundation claims business, as is, in Texas.
    "Prattling on and on about being an ass with experience doesn't make someone experienced. It just makes you an ass." Rod Buvens, Pilot grunt
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    Wagenmaster
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    07/13/2012 3:45 PM

    Tx HO-A w/ Water Damage Coverage Endorsement (for use w/ form HO-A) which states in part:

    Sudden and Accidental Discharge, Leakage, Overflow or Release of Water or Steam from within a System Or Appliance.

    This peril does not include any discharge, leakage, overflow or release of water or steam over a period of weeks, months or years, even if the dischareg, leakage, or steam, or any resulting loss, is hidden or concealed.

    This peril does not include a discharge, leakage, overflow or release of water or steam from within a System that is either below the surface of the ground or within or below the slab or foundation.

     

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    FRED
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    07/13/2012 4:52 PM
    Also the denial letter stated "Our investigation revealed a plumbing line located within the foundation area of your home developed a leak." Again, my question is where does the foundation start and stop?
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    Leland
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    07/13/2012 5:55 PM
    I know you didn't mean it mean, neither did I. You know you are my brother from another mother.

    And of course we need a Texas adjuster to comment. I agree. We also (as usual!) need to see the actual policy wording.

    That will be a start, if we get the wording.

    I totally agree- will a Texas adjuster that has dealt with this issue please comment? Or maybe a TX attorney or PA?
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    Wagenmaster
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    07/13/2012 6:42 PM

    Tx HO-A w/ Water Damage Coverage Endorsement states in part:

    Sudden and Accidental Discharge, Leakage, Overflow or Release of Water or Steam from within a system or Appliance.

    This peril does not include any discharge, leakage, overflow or release of water or steam over a period of weeks, months or years, even if the discharge, leakage, or steam, or any resulting loss, is hidden or concealed.

    This peril does not include a discharge, leakage, overflow or release of water or steam from within a System that is either below the surface of the ground or within or below the slab or foundation.

     

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    Wagenmaster
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    07/14/2012 11:34 AM

    Tx HO-A w/ Water Damage Coverage Endorsement which states in part:

    Sudden and Accidental Dischare, Leakage, Overflow or Release of Water or Steam from within a System or Appliance.

    This peril does not include any discharge, leakage, overflow or release of water or steam over a period of weeks, months, or years, even if the discharge, leakage, overflow or steam, or any resulting loss, is hidden or concealed.

    This peril does not include a discharge, leakage, overflow or release of water or steam from within a System that is either below the surface of the ground or within or below the slab or foundation.

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    Atfulldraw
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    07/15/2012 2:10 PM
    I don't know if I qualify as a genuine Texas ADJUSTER -- I did spend all that time in Louisiana ;)

    excerpt from 470-T Endorsement....

    Your answer is in the policy language.

    Note:  This certainly isn't advice -- just a portion of the policy language quoted for your convenience and discussion....I'm not your lawyer, nor am I a public adjuster.


    SECTION I PERILS INSURED AGAINST
    The following perils are added:

    ...

    15. Sudden and Accidental Discharge or Overflow of Water or Steam from within a plumbing, heating
    or air conditioning system or household appliance.

    a. We cover the cost of tearing out and replacing that part of the dwelling structure, excluding the
    slab or foundation, necessary to repair or replace the system or appliance. But this coverage
    does not include loss to the system or appliance from which the water or steam escaped.

    b. We do not cover sudden and accidental discharge, or overflow of water or steam from within a
    plumbing, heating or air conditioning system or household appliance that is either below the
    surface of the ground or is within or below the slab or foundation of the dwelling.

    c. We do not cover loss caused by constant or repeated seepage or leakage of water or steam that
    occurs over a period of 14 days or more.

    d. We do not cover loss caused by or resulting from freezing except as provided in Peril Insured
    Against 16. Freezing.

    e. In this peril, a plumbing system or household appliance does not include a sump, sump pump
    or related equipment or a roof drain, gutter, downspout or similar fixtures or equipment.
    Rod
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    Leland
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    07/16/2012 11:47 AM
    I called an Austin Texas attorney who does insurance plaintiff work and writes newsletters on similar cases, he said he doesn't know of any texas case law about this specific issue.

    We have the same wording in California on some policies.

    "...below the surface of the ground or is within or below the slab or foundation of the dwelling"

    Only if the adjuster has a more generous interpretation (i.e. pipe in the fill dirt is not "underground") could I see your friend getting coverage.

    A plain reading of the policy language looks like you are stuck with a denial.

    Like I was saying, you can ask a supervisor but I think you are probably out of luck.
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    CatAdjusterX
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    07/16/2012 10:04 PM

     

    In regard to the specific language contained within the policy that Rod provided and before I go any further, let it be known that this is NOT my area of expertise' (90% of claims I have handled are CAT related. Some experience with daily claims but I have never been in the situation to try and intrepret the text contained herein and made a coverage decision either way)

    The ONLY reason I am commenting on this specific issue is, whilst I do not have an answer to the coverage side of this query, I do have considerable knowledge as it relates to concrete and concrete construction.

    So in this specific policy:

     We do not cover sudden and accidental discharge, or overflow of water or steam from within a
    plumbing, heating or air conditioning system or household appliance that is either below the
    surface of the ground

    OR

    A) is within 

    OR

    B) below the slab or foundation of the dwelling.

    As it relates to the wording in bold ONLY, first exclusion text is the word "within" that simply infers plumbing/electrical conduit etc... that is "encased" within the slab itself.

    So with pier and beam contruction, 

     the first exclusion text "within" would not apply.

    The second exclusion text:

    "below the slab"would not apply

    OR

    The third exclusion text:

     "below the foundation of the dwelling" would also not apply.

    The actual location of the affected plumbing/piping would fall between the second and third exclusion and it is there where a gray area exists and coverage could be argued. The soil between the joists and the plumbing/piping is not technically considered "sub"surface and is what Leland stated "infill"

    Of course I am not an attorney nor am I an authority or expert in regards to coverage issues.

    "A good leader leads..... ..... but a great leader is followed !!" CatAdjusterX@gmail.com
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    HuskerCat
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    07/16/2012 11:37 PM
    But, of course you just couldn't help yourself.........I know, the threads are lacking input.  I remember the hotbed days this would have had a hundred responses.  All the good old boys are gone. And no one else wants to join the party, including me.   It's a sad state of affairs right now, but maybe it will pick up again if the work picks up for more folks.
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    Leland
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    07/17/2012 5:05 PM

    Can we get a diagram of the cross section of a house?

    on the left is the orginal raised foundation

    on the right is a slab on grade addition

    sole plates and framing are not shown. not to scale.





    F
    -------------------------------------------------------
        __floor joist__________________ _______
    i i.............................. A.................................. i i................................................. i i
    i i.................................................................... i i................................................. i i
    i i......... crawl space 18' high.......................... i i======================i i
    i i.................................................................... i i........... slab..... B.......................i i
    i i ---------------------------------------------------i i................................................. i i
    i i.................................................................... i i................................................. i i
    i i.................................................................... i i................................................. i i
    i i.................... C............................................. i i ............................................... i i
    i i.................................................................... i i......................D........................ i i............ E.............. (grade level)
    i i.................................................................... i i .................................................i i

    i i..................................................................... i i...................... H ......................i i .................I
    i i..................................................................... i i =====================i  i...........  lowest point of foundation

    G

    detail:

    A pipe underneath the underside of the wood subfloor. This pipe is in the crawlspace and visible to the eye. It is above the dirt. It is in between the foundation walls.
    B pipe located inside the slab and also above grade
    C pipe below the surface of the fill dirt but above the lowest part of the foundation. Above grade level. below the subfloor.
    D pipe in the slab AT grade level (not really above or below grade, AT grade)
    E pipe above ground, outside the house
    F pipe inside the house, above the floor, way above the foundation and also above the grade level
    G pipe below everything: below the lowest point of the foundation, below grade, underground...
    H pipe inside the slab and also slightly below grade
    I pipe in the dirt, outside the house, but above the lowest point of the foundation

    which pipe best fits the claim scenario we have here?

    which pipe is almost always denied on a typical H03?

    which pipe is would usually be covered under an HO3 (barring some other exclusion)

    pipe C is in a bit of a gray area- is it "underground" or not? It is in the (fill) dirt but it is above grade. Is it "below" the foundation? Certainly it is below the highest point of the foundation but it is not below the entire foundation.

    If a person is sitting in a car they are "below" PART of the car- the roof part. But could you say they are "below" the car? No, you can't.

    By the same token pipe C is not "below" the foundation. But it is in the dirt. Is it "underground"?

    Whether pipe C is "underground" is subject to interpretation.

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    Atfulldraw
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    07/18/2012 1:22 AM
    Nice diagram! :)

    I'll just say that if you raised the grade and added you hypothetical slab on the (new) grade, a pipe within the slab would be clearly excluded.
    Consequently, it would make sense that a pipe on the same elevation between the floor joists would likely be excluded as well.

    Just food for thought....but now back to the language.....

    I think the analysis is wrong.
    the words "within or below" refer to both "the slab or foundation of the dwelling"

    Aren't the the joists and beams considered to be part of the foundation of the home?
    I believe the demarcation point would be the floor - anything below the floor is the "foundation" that the remainder of the structure rests upon.
    Rod
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    Leland
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    07/18/2012 1:22 PM
    Rod, you bring up a great question.

    I have never thought of the girders and cripple posts etc. as part of the "foundation" but certainly that is a decent argument. 
      
    I was going to mention we need a definition of "foundation". Here's another way to look at it: even the dirt under the slab, especially when it's fill dirt, can be considered part of the foundation from an engineering standpoint.

    So it is not entirely clear what "foundation" means. Since the word is not defined in the policy a court would probably look to case law if there is any, or the dictionary if there isn't.

    And terms that can be interpreted in more than one way will usually be interpreted in favor of the insured.

    So if the policy covers the "foundation" the word would be construed broadly and if the policy excludes the "foundation" or things below it the word would be construed narrowly.

    I would be interested to see if this specific question has ever gone to court. Texas has case law on foundation damage from water leaks but those cases don't deal directly with this issue. In this case the danage is to non-foundation elements - unless the insurance company starts to use your definition, which it doesn't sound like they are.
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    CatAdjusterX
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    07/18/2012 10:49 PM
    Posted By Mike Kunze on 16 Jul 2012 11:37 PM
    But, of course you just couldn't help yourself.........I know, the threads are lacking input.  I remember the hotbed days this would have had a hundred responses.  All the good old boys are gone. And no one else wants to join the party, including me.   It's a sad state of affairs right now, but maybe it will pick up again if the work picks up for more folks.

    .................................

    Just taking a shot at it, nothing more nothing less. After reading the other adjuster posts, it seems as if there may be something, albeit something that would require counsel and above what we as adjusters could determine. Seems the exclusion language could be construed as too broad and as stated in those cases, coverage  could fall in the favor of the insured.

    We all learn something new everyday.

    "A good leader leads..... ..... but a great leader is followed !!" CatAdjusterX@gmail.com
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    FRED
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    07/24/2012 12:06 PM
    Sorry it took so long to get more info on my question. The plumber advised the pipe was laying on top of the ground under the dwelling when a hole developed and sprayed water onto the underside of  the subfloor causing interior damage to the finished flooring. All of your comments and observations are greatly appreciated. Thanks, Eddie
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