Many of the homeowners we review exclude water damage due to "continuous or repeated leakage or leakage of water or electricity, or the presence of condensation of moisture, moisture or vapor that occurs over a period of weeks, months or years." Courts have interpreted this clause to exclude water damage that occurs for 14 days, but what happens when you have a situation where significant water damage occurs during the first thirteen days? Coverage clauses are not interpreted to a large extent to provide the insured maximum protection, while exclusion clauses
We recently investigated an issue where a water pipe to a refrigerator blew up in a holiday home and released an estimated 1
In Hicks v. American Integrity Insurance Company of Florida 1 an appellate court faced a similar situation, leakage of a refrigerator line for an extended period of time led to a loss. There, the court found:
In the light of the general principle that insurance provisions that are susceptible to more than one interpretation should be interpreted liberally in favor of the insured and strictly against an insurance company, and that exclusion clauses should be read even more narrowly. Excluding losses caused by constant or repeated leakage or leakage for a period of fourteen days or more does not unequivocally exclude losses caused by leakage or leakage for a period of thirteen days or less. [citations omitted] It is not unequivocally clear that a provision that excludes losses caused by constant water leakage for a period of fourteen or more days also excludes losses caused by constant water leakage for a period of less than fourteen days . And ambiguous insurance provisions – those that are susceptible to more than one sentence, one that provides coverage and the other that denies it – must be interpreted against the insurer and in favor of coverage. The
Hicks decision does not govern this insurer, and as such we filed a complaint for breach of contract and requested an explanatory judgment on the policy language in the Arizona District Court. In Arizona, "The language used in insurance must be viewed from the point of view of the average layman who is not trained in law or insurance." 2 Hopefully, the Arizona District Court will agree that damages occurring during the first thirteen days should be covered.
1 Hicks v. American Integrity Ins. Co. of Florida 241 So.3d 925 (Fla. 5 2018).
2 Gittings v. Am. Family Ins. Co. 181 Ariz. 176 (App. 1994).