Hi

One week ago the basements of 8 houses on our street got flooded because of a city water main pipe that burst. Everyone got 2-3 feet of water in their homes (approx 1300 square feet).

We called our insurance to start the claim and they said we are covered for this but now they want to send a plumber to check the installations in our home. As far as we know the drains in the garage and furnace room are working properly. Is there anything in particular that they may be looking for and is there anything we can do before they come next week?

Thanks.

 

This probably has about zero probability of being right, but will the insurance company go after the city for reimbursement? If so then maybe they want a certification from a plumber that the water came from the outside of the house and not from the inside, in other words, the plumbing in the house is OK and is not responsible for the damage, so obviously the city caused flood caused the flooded basement.

That would seem to be obvious if the streets are flooded– but maybe it’s just kind of a red tape thing, a formality. Before the insurance company can go after the city they need to show the water came from the outside.

Well as I write this the more wacky it sounds – lol. But good luck with the cleanup I hope you didn’t incur too much damage.

(just thought, I guess you could have good plumbing and still flood your own basement, but ...who knows)

 

A claim with the city has been made and they should pay for whatever insurance does not cover.

 

Usually, municipalities are "self-insured" and there's a claim process.

What is supposed to happen with insurance is that Insurance Co. pays Owner NOW,
and in return Owner assigns their right to reimbursement/right to sue to the Insurance Co. Insurance Co. is reimbursed LATER by whoever caused the damage.

Eh, not necessarily :
"Ladies and gentlemen of the JURY, our pipe was fine, it met every known standard for water service; the unexpected COLD caused the flooding."

Twist is "water damage" versus "flood damage"

Basically "water damage" is caused by a broken pipe inside the house.
"Flood damage" is caused by water flowing over the ground as a result of a "natural catastrophe".

In the US, water damage is generally covered by home insurance, while flood damage is NOT- (don't know what the situation is in Canada)

 

So it seems to me that this is a broken pipe that caused flood damage and should be covered by insurance.

 

I wouldn't even call my insurance company, the liability is 100% on the City. I recently had something similar in a rental house where the City sewer line clogged and backed up into the basement of the house I own. Not being there I had to go by what the tenant told me so I called a local sewer company. They immediately discovered it was a clogged sewer main and called the City. I told the tenant to call the City and ask for a claim form and she was put in contact with the third party company that administers the self insurance of the City. They accepted the claim as problem was 100% theirs.

 

But often going thru your insurance is the quickest way to get your house back to normal. I had a friend that used to live across from an abandoned factory that burnt to the ground. The fire was so intense that it melted his vinyl siding and shingles along with causing a few windows to break. His insurance got his house back to normal in a week or so. It was several yrs before things where settled with the old factory owner's insurance.

 

Sounds like the old Bethlehem Steel Plant in Lakawanna, NY that burned down in 2016 and destroyed a whole neighborhood.

 

There's an important difference between "accepting responsibility" and paying quickly.

Also depends on what City/Municipality you're in.

For example, in Pennsylvania, local governments have a cap of $500,000 per event on liability. So, water main break floods 8 homes, that's $62,500 per home (should cover it). But if it floods 100 homes, that $500,000 gets split 100 ways, and it's $5,000 each.

 

And is that when law suit takes place? Class action?

 

Maybe I misunderstand that thought, but I’m not talking about the city defending itself if its pipe caused the damage. I’m suggesting that the insurance company might want to convince the city that the homeowner’s pipes did not cause the damage. But that convincing might not be necessary, just a guess that it might. The original post was asking why the insurance company would be sending out a plumber.

Regardless, I think the event will in fact have to be “Water Damage” since “Flood Damage” does not apply here. It seems it would just be a matter of whose pipes caused the “Water Damage”. I think it’s called a “Sudden Water Discharge”, not a “Flood”, when the city has an accident and it would fall into the insurance company’s “Water Damage” category.

“Flood” is defined as affecting at least 2 acres of land, and I doubt if anyone in the city would have “Flood Insurance”. I think most people outside “Flood” areas do not have flood insurance.

 

I think they are determining whether this situation is treated as

A) Insurance- fix damage that results from something on the property breaking.
B) Indemnification, fix damage to the property caused by a 3rd party or "act of god" that originated outside the property.

In the US, homeowners Insurance generally does NOT cover broken water mains.


CONSUMER REPORTS
What Flood Insurance Does and Does Not Cover
It's invaluable, but you need to understand the deductibles, dollar limits, and restrictions
By Tobie Stanger
Last updated: September 21, 2018

You might, for instance, find your basement and even your first floor inundated by winter snow melt. Or a water main could break in your neighborhood. In areas that are heavily paved, leaving few places for water to be absorbed in soil, spring rains can create overflow—from lakes, reservoirs, rivers, and ponds—that enters homes. Even homes in desert areas can be affected by flooding if sudden, intense rains can’t quickly be absorbed by the dry ground.

Flood insurance covers all these perils. Homeowners insurance doesn’t.

Sounds like THIS was covered, but would be treated as Indemnification:
Insurance Co. pays now, and then gets reimbursed by collecting/suing the 3rd party (City) who caused the problem.


IIRC, that's part of the US federal flood insurance definition, the OTHER part is that flood inurance does cover if there are "2 or more properties" affected.

No idea about Canadian/Montreal area rules.

 

That's what good attorneys are for. Under some circumstances it may be in the interest of the homeowner to call his insurance company and under other circumstances maybe not.