Finally, some good news about fire damaged Southern California, the rains have come and will be of assistance in the control of the fires still burning. But in addition to the good news there is bad news, that mudslides in the burn areas could present some problems for some insureds and their insurance companies.
What is A Mudslide?
A mudslide will take place when a large amount of water impacts the ground, on a hill. or mountain side. The impact will cause the rapid wearing away of the dirt resulting in the dirt, rocks and mud traveling downhill causing damage. The cause of the slide is usually the result of a rainstorm.
Mudslide As a Coverage Issue
Why would coverage for damage from a mudslide be questioned? The following language is found in most Homeowner policies concerning the lack of coverage for the following types of Water Damage,
Section I-Exclusions, we do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss...
a. Ordinance or Law, (…)
b. Earth Movement, (…)
c. Water Damage, meaning.
1. Flood, surface water, waves, tidal water or spray from any of these wether or
Not driven by wind.
2. Water which backs up through sewers or drains or which overflows from
From a sump, or
3. Water below the surface of the ground, including water which exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structure.
Direct loss by fire, explosion or theft resulting from water damage is covered.”
Is it Covered or Not?
Many insurance companies will be issuing denial letters to their insured’s based upon the evidence that what produced the landslide that resulted in damage was caused by water damage, usually in the form of rainstorm(s).
The following is an example of the route the investigation should take,
Inspection of the risk,
Document damaged and undamaged building items,
Obtain a statement from the insured concerning the circumstances of the loss, most importantly when the mudslide takes place,
The insurance adjuster needs to be looking for the PROXIMATE CAUSE of the mudslide, (that event which is closest to the cause of the loss), The adjuster needs to determine what the event which first occurred was leading to the mudslide and resulting damage. If the proximate cause of mudslide was the wildfire, then the insured will stand a good chance of having coverage applied to the loss. The following is a good definition of a proximate cause to be used when evaluating potential coverage:
“An insurer is liable for a loss of which a peril insured against was the proximate cause, although a peril not contemplated by the contract may have been a remote cause of the loss; but it is not liable for a loss of which the peril
Insured against was only a remote cause of the loss.”
If I can answer questions for you, please contact me at my email address below.
Respectfully submitted,
Norman Lambe
nwlambe@gmail.co,m
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