“Now the flood was on the earth forty days. The waters increased and lifted up the ark, and it rose high above the earth. The waters prevailed and greatly increased on the earth, and the ark moved about on the surface of the waters.” [Genesis 7:17.]

I’m guessing that people didn’t have flood insurance in the times of Genesis.  Many people and businesses don’t have it now. The problem is, if water is involved in an insurance claim in any way, and you don’t have specific flood insurance, guess what the insurance company is going to try to argue?  (Specific flood insurance often has limits that aren’t equal to the task anyway, unless you’ve bought excess flood coverage.)

Standard homeowners and business insurance policies generally don’t cover flood damage.  They’ll cover some damage from rain, but if your home or business is filled with water as a result of rising water from lakes, rivers, streams, or the ocean…you have a potentially big problem.  (Remember Sandy?)

But just because water is involved doesn’t mean the inquiry is over.  Don’t take no for an answer. Dig through the policy language and ask whether there’s any way that your problem may not fall within the specific terms of a flood or water damage exclusion. Remember, as the policyholder, you’re supposed to get the benefit of the doubt.  (Judges sometimes forget that, but it’s pretty clear law.) (Also…buy flood insurance.)

In Sosa v. Massachusetts Bay Insurance Company, for example, the New Jersey Appellate Division recently found that the carrier’s reliance on a water damage exclusion was, well, all wet. (You can read the decision here.)  The case involved a ruptured water main that caused a flood into the policyholder’s garage and basement apartment. The carrier’s adjuster inspected the property and concluded that the damage resulted from “surface and ground water intrusion.” The policy excluded losses caused by “water damage,” so the carrier disclaimed. The trial court agreed with the insurance company and dismissed the policyholder’s case.

One of the problems was that, at deposition, the policyholder testified that “There was a flood and there was damage to my home.” Insurance is a word game.  Be careful. This statement happened in a deposition, but sometimes it happens when the claim is phoned in to the insurance company claims department (sometimes on a recorded line). You’re better off having your broker or insurance coverage lawyer make the claim so you don’t inadvertently give the insurance company ammunition for a denial.

The carrier’s own policy language, though, defined flood as “a general and temporary condition of partial or complete inundation of normally dry land areas.” A water main break involves localized damage, not a “general and temporary condition of partial or complete inundation,” and doesn’t qualify. The flood exclusion was therefore ambiguous, and had to be construed against the carrier.

The policy also didn’t define “surface water.” Looking to New Jersey statutes and regulations, however, the Court found that “surface water” has “a permanent nature, akin to a body of water.” A water main break doesn’t meet the standard. As for water below the surface of the ground, the water main break didn’t qualify as that, either.  The Court wrote: “Simply put, the water that damaged plaintiff’s home was no longer ‘below the surface of the ground’ when it reached his property; it was above ground.”

The Court noted the insurance company’s sneaky insertion of the water damage exclusion into an endorsement dealing with sump pumps, writing: “An endorsement with no title at all would have been less problematic than the one employed here.”

Because there were unresolved factual issues as to the amount of the covered damage, the case was remanded to the trial court for further proceedings.

The bottom line is that insurance companies often perform superficial factual investigations and then attempt to fit claims within exclusions that may not necessarily apply. The squeaky wheel sometimes gets the grease, as the old saying goes.

This case was handled on the policyholder side by Jeffrey Bronster, a former prosecutor, whose background is here. To succeed on a complicated insurance claim, unfortunately, you may need a prosecutor’s relentlessness.