Homeowners property policies often contain exclusions for loss caused by
surface water runoff. While it may seem that the terms "surface
water" are self-explanatory, not all damage from running water is
excluded.
The courts in several jurisdictions have carved out scenarios where such
damage may not fall within the surface water exclusion, such as incidents where
the origin of the water was not natural or the flow of the water was channeled
by another structure on the ground.
There are a number of courts that have held that the "surface
water" exclusion does not apply to damages caused by water that is
interrupted or channeled by man-made structures or water that is not of a
natural origin. For example, the Colorado Supreme Court held in Heller v.
Fire Ins. Exch., 800 P.2d 1006 (Colo. 1990), that spring runoff of melting
snow diverted from regular path onto the Hellers' property by three
parallel trenches constructed behind property was not "surface water"
because trenches were "defined channels." The court held that surface
water follows no defined course or channel.
In Cochran v. Travelers Ins. Co., 606 So. 2d 22 (La. App. 1992),
the Louisiana appellate court held that rainwater that overflowed and seeped
from the roof into the interior of the building was not "surface
water" because it was not water that collected and lay on the ground. In
Ebbing v. State Farm Fire & Cas. Co., 1 S.W.3d 459 (Ark. App.
1999), the Arkansas appellate court held that water from burst water main was
not "surface water" because it did not accumulate from natural
causes. Finally, in Aetna Fire Underwriters Ins. Co. v. Crawley, 207
S.E.2d 666, 668 (Ga. App. 1974), the Georgia appellate court interpreted
"surface water" strictly to water on surface of ground and not to
rainwater falling on and flowing from the roof of an insured dwelling.
The majority of courts interpret the surface water exclusion broadly to
apply to damages caused by water that ran onto some man-made object, instead of
directly onto the earth. For example, Texas courts recognize that the surface
water exclusion applies to damages caused by water that runs over various items
or the flow is altered by items built on top of the ground. In Crocker v.
American Nat'l Gen. Ins. Co., 211 S.W.3d 928 (Tex. App. 2007), the
court of appeals affirmed a summary judgment in favor of American National
General Insurance Company (ANGIC), holding that the surface water exclusion in
the homeowners policy issued to the Crockers barred their claim for damage to
their home. The Crockers' homeowners policy provided that:
We insure against all risks of physical loss to the property … unless the
loss is excluded in Section I Exclusions.
Section I provided:
We do not cover loss caused by or resulting from flood, surface water,
waves, tidal water or tidal waves, overflow of streams or other bodies of
water or spray from any of these whether or not driven by wind.
The court noted that the term "surface water" was not defined by
the policy and referred to other Texas cases that have defined "surface
water" in the insurance context as follows:
Surface water is defined as water or natural precipitation diffused over
surface of the ground until it either evaporates, is absorbed by the land, or
reaches channels where water naturally flows. [Citations omitted.]
"Flood water" and "surface water," therefore, have a
terranean nature, i.e., water overflowing its natural banks or which does not
form a well-defined body of water—as opposed to water below the surface,
whether from a nature or unnatural source.1
In the Crocker case, the water entered the house "from a
raised patio." The parties agreed the resurfacing of the patio caused
rainwater to drain into the house instead of into the flower beds as planned.
The Crockers argued that because the rain hit the patio instead of the dirt,
and the top of the patio was 8 to 10 inches or a foot from the soil, it was not
water on the surface of the ground. ANGIC argued it would:
be a strained interpretation of 'surface water' to hold that it
does not include rainwater that falls upon concrete and asphalt structures
such as patios, roads, driveways, playground blacktops and parking
lots—structures which are by their nature placed upon the surface of the
ground.
Id. The court agreed and held that the ordinary meaning of the
words "surface water" reasonably can include rainwater that has
collected on the surface of their patio relying on several other Texas cases on
point.2
The Illinois court in Smith v. Union Auto. Indem. Co., 752 N.E.2d
1261, 1266 (Ill. App. 2001), appeal denied, 763 N.E.2d 778 (Ill.
2001), discussed whether water could be "surface water" when its flow
had been altered by man-made structures. In Smith, during a torrential
rainstorm, the window wells in the basement of the Smiths' home filled with
water, causing the windows to break and the basement to fill with 5 feet of
water. Water also came into the basement through the sewer drain. The court
held that the average reasonable person would not limit surface water to water
whose flow has not been altered in any way by paved surfaces, buildings, or
other structures. Id. at 1267. Therefore, the court held the water
entering the Smiths' home as a result of a torrential rainstorm was surface
water excluded by their homeowner's insurance policy.3
Dana
Harbin is an attorney in the Dallas office of Cooper & Scully,
P.C. where she specializes in insurance coverage and bad faith involving all
types of insurance policies, both first and third party. Ms. Harbin earned her
BA degree from the University of Texas in Arlington and her JD degree from the
University of Texas at Austin. She can be reached at