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What Does the Coverage Exclusion Clause in Homeowner’s Insurance Regarding Surface Water Mean?

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In the case of Martinez v. American Family Mutual Insurance, (2017 COA 15) the Colorado Court of Appeals determined how to interpret certain language in the policy.

In this case, Michael Martinez (“Martinez”) filed suit against American Family Mutual Insurance (“American”) for damages to his home caused by hail and rain that collected in the home’s below-ground window wells. American denied the claim because flooding and surface water were specifically excluded from coverage under the policy. Martinez filed suit for declaratory judgment on the coverage issue, among other claims. The trial court granted American’s motion for summary judgment. On appeal, Martinez argued that the district court erred in granting American’s motion for summary judgment because flooding and surface water were not excluded from coverage.

The Court pointed out that Martinez changed his story of what happened a couple of different times. First, he contends that damage to his basement and personal property was not caused by “surface water.” Second, he contends that, even if the water was surface water, it lost that character when it entered the window wells. In an earlier claim he said the hail had clogged up the window wells so the rain water could not properly drain, and it damaged his home.

The Court of Appeals interpreted the meaning of the insurance agreement and applied the Colorado Supreme Court’s definition of surface water and the plain-language definitions of “the earth’s surface” and the rain and hail in this case. The Court concluded that the precipitation that fell on Martinez’s home and then flowed into the window wells was all surface water, which the insurance policy clearly and plainly excluded from coverage. Therefore, the Court of Appeals confirmed the lower court’s grant of summary judgment in favor of American.

The Metier Law Firm is committed to assisting people with personal injury claims throughout Colorado, Wyoming and Nebraska, and we frequently serve as co-counsel to law firms nationwide. Tom Metier recently secured the largest personal injury verdict in Colorado.

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