Insurance Coverage Q&A: Ruptured Pipes, Backup, and Water under the House

The insured has an HO3 and during Storm Ida has a pipe rupture under the house that caused water to back up into the basement; the sump pump failed causing water damage to the finished basement. In addition, the accumulation of water under the house caused a sinkhole and the foundation shifted making the house unlivable. Hanover has denied coverage for the loss but they did pay for the repair of the pipe that ruptured under Service Line coverage. The company has determined that flooding was the proximate cause of the damage diverting water and putting pressure on the sewer line, listing flood as the exclusion. We don’t think the claim should be denied based on flooding. FEMA defines flood as affecting 2 acres or 2 or more homes. While 7″ of rain put pressure on the pipe, had the pipe not burst, there would have been no claim.