Cool, Refreshing, Therapeutic, Annoying,

Damaging, Destructive Water

Isn’t it great to listen to the waves lapping on the shore on a summer evening? Maybe it’s the trance-like, relaxing effect of a gentle spring rain that forces you to do some reading. It could just be the refreshment that you gain by dipping into a pool on one of those intense summer days.

 

Water is a wonderful resource – quite beneficial…if kept within its boundaries. This would include, for example, a creek…or plumbing.

 

If allowed to escape from its usual environs, h-o-o, boy! Then, can we have a problem. Water can be quite destructive and lingering. Thank goodness for the insurance policy. Right?

 

One of your maintenance people calls to say that there is significant water damage to the dry wall ceiling and furnishings in one of your offices. It turns out that there has been a leak in one of the upstairs toilets. What a mess.

 

You have one of those Perfect Property Insurance Policies. Thank goodness. This loss has to be covered. Well…? Technically, the policy will respond to water damage resulting from “…the breaking apart or cracking of any part of a system…”. Is this what happened? Was it just poor maintenance? Also, the policy has a stipulation that any “…continuous repeated seepage… over a period of 14 days or more…” is not covered either. The policy is trying to say that it will not respond to improper maintenance, so these can be contentious claims.

 

You moved out of your building on West Main Street a few months ago. In checking up on the building, which was still owned, one of your staff notices that there is significant water damage – apparently due to a break in the plumbing.

 

Thank goodness, it was due to a break. That’s covered. Well...? A portion of the policy has a vacancy provision. It stipulates that water damage will not be covered within a

(Continued on page #)

Page 1

The Protection Quarterly

building that has been vacant for more than 60 days prior to the damage. So, it looks like this one is on your organization, unless you were able to obtain a special endorsement.

 

“Mary, Mary!” One of your associates screams. Water is cascading out of the drain in the kitchen. Water back-up, Ugh!

 

Luckily, you have your Perfect Property Insurance Policy. Well? You can’t believe how explicit the policy is in indicating that water back-up is not covered, unless you have a special endorsement. Look at the mess we have to clean up – not to mention all the repairs that have to be made!

 

“Will this rain ever let up?” complains one of your associates as he comes in on a Tuesday morning. Just then, John barks from upstairs, “We have a major leak. It’s coming down the walls!” It turns out that the rain was so heavy that it backed up underneath the asphalt shingles on the roof.

 

You approach the Perfect Property Insurance Policy a bit more cautiously. Uh-oh, heavy rains entering a building in this situation, would not be covered unless there is damage to the building itself first. In this case, it is not as if a windstorm had ripped off some of the roofing shingles to allow rain water to enter so it will probably not be covered. Insurance companies attempt to make these type of damages the result of an accidental and fortuitous loss – as opposed to a maintenance issue (which includes a cluttered gutter).

 

In the middle of a meeting, water starts to infiltrate beneath the rear door of your conference room. “Where’s the water coming from!” It turns out, that there is a large incline behind the building that will allow for rain water to accumulate and enter the building. Clean up lasts through the night.

 

“It’s gotta be covered under the Perfect Property Insurance Policy! Oops, the water exclusion doesn’t even cover this!” Unless, there is a specially crafted endorsement, this surface water peril would not be covered.

 

Humble Creek is so picturesque. You wish you were closer to it – maybe even able to look at it from outside your rear office – but it’s about a half mile away. Then, there was this strange occurrence. It rains… then it rains and keeps on raining. It turns out that heavy rain

(Continued from page #)

cells get stalled in your vicinity (funny, that has never happened before.). Humble creek becomes a bit swollen… then a lot swollen. Finally, the national weather service has issued flood warnings for your area.

 

Enough with the perfect Property Insurance Policy already. You have read it enough times, at this point, to know that Flood is not covered! You even know, by definition, it would include a temporary overflow of water from within its natural boundaries.

 

Conclusion

 

Flood coverage generally includes not just the temporary overflow of water from within its natural boundaries but also sewer/water backup and surface water events. The majority of flood losses occur in areas that are not designated as flood prone! You may be able to obtain special endorsements which will give a certain level of surface water or sewer water back-up coverage – by endorsement.

 

If you do obtain Flood Coverage, it will carry a high deductible on the of $25,000-50,000 per occurrence. This is because it is considered a catastrophic event even by insurance industry standards. A Bank which finances you may tell you if you are in a flood-prone area.—- or you can contact FEMA. These types of properties need to be covered under the National Flood Insurance Plan since insurance carriers will not cover this type of exposure. The suggestions are, therefore:

 

-Building maintenance – particularly for piping in a building is critical. Also, attention should be made to roof and drainage areas.

 

-Resultant mold (even if the claim is covered) in typically limited. Quick and comprehensive remedial action is vital.

 

-Consider the purchase of Flood Insurance Coverage. It does carry a high deductible and it does represent an additional cost. Depending on your situation, it may prove worthwhile. With flood, you would also need to consider that more than one of your locations could be impacted depending upon their proximity to each other.

Perfect Property Insurance Policy

Page 1

Volume 6, Issue 1

 

Mgr./Clueless Div.:     Kathleen Durkin

Whiner:              Frank Menna

Printer:               Karen Mulhern

Key Grip:             Melissa Murphy

Candy Stock Mgr.      Valerie Metzger

Welcome Back, Val !

Start Here...