WEST PALM BEACH – Oral arguments in a closely watched property insurance case concluded last month, with the plaintiffs’ attorney arguing that People’s Trust Insurance Co. failed to provide adequate compensation for water damage to a Coral Springs home.
The 17th Judicial Circuit Court in Broward County last year sided with the insurance company over plaintiffs Gene Dodge and Kathleen Dodge. The plaintiffs alleged in a lawsuit that the insurer breached their property insurance policy by not providing full compensation for damage when a deteriorated sewer line caused a water backup and overflow on their property.
The circuit court concluded that a limited water endorsement contained in the policy was unambiguous in its provision that ensuing damage from a deteriorated plumbing line was limited to a $10,000 payout. People’s Trust paid this amount and thus fulfilled its commitment under the plaintiffs’ policy, the circuit court ruled.
But the plaintiffs appealed the case to the Fourth District Court of Appeal, where the oral arguments took place last month. The plaintiffs’ attorney, Mark Nation, emphasized that the main part of the home insurance policy provides up to $250,000 for losses resulting from water damage.
The insurer does not generally cover wear and tear or deterioration, but an exception to that rule is outlined when an accidental discharge of water in the plumbing system occurs, according to Nation. In addition, this exception covers the cost of tearing out and replacing any part of the structure, he said.
Nation also argued that there’s a distinction to be made between natural processes such as pipe corrosion and acts of nature or acts caused by animals or humans.
But People’s Trust’s attorney, Mark Tinker, argued that external elements acting on the pipes led to the corrosion, as opposed to normal “wear and tear.”
In addition, according to Tinker, the plaintiffs signed off on a water endorsement that limited compensation for such water damage to $10,000.
“That’s the contract that the parties bargained for,” he said, noting that the water endorsement and other provisions in the policy reduced the policy cost by about $150.
“This is an important issue because these cases are prevalent throughout the state, especially for my client, People’s Trust,” Tinker said during the oral arguments.