Earth Movement Damage
What you need to know about Earth Movement
Although most insurance policies exclude earth movement there are some that include this coverage with limitations and exclusions. The proximate cause of the earth movement is key to successfully obtaining coverage.
Earth movement may be caused by a verity of reasons and courts across the U.S. have mixed opinions about what should be covered.
Depending on the type of policy and the special endorsements you purchased, you may prevail for this highly excluded peril, especially if it is determined that the proximate cause of your loss was a covered peril under your insuring agreement.
For example, if you purchased an earthquake policy, which event caused the earth to shift, raise, sink, contract or expand resulting in damages to your building’s structure, personal and or business property you should be covered, as long as there are no additional exclusions and or increased hazardous conditions that you created, which substantially contributed to the earth moving you should prevail.
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Increase hazards can void insurance coverage and carrier’s have successfully argued that they would not have insured your property had they been aware of the additional exposures you created for them, especially post inspection of your property by an agent of your carrier.
An example of an increased hazard for a covered earth movement claim would be if the policyholders constructed an unapproved septic system (hole in the ground) and for years drained washing machine, sump pump and basin waste water into the hole, eventually eroding earth and creating a void. After an earthquake event caused damage to the building a carrier’s engineering firm could easily argue that the unapproved septic system created a void and substantially increased the hazard, which contributed to the foundations lack of support during the earthquake.
The engineering firm may cite the lack of substantial damage to comparable structures similarly located from the earthquake’s epicenter. Naturally, depending on the extent of damages to the subject building there may be no other option than to litigate the matter, using experts to level the playing field.
There are thousands of reasons claims are denied, many being reversed in the courts due to ambiguity in the policy verbiage. Some finding their way through the appeal process and beyond. A very expensive undertaking.
In the event of your building was affected by the exclusion of earth movement, and you suffered a secondary loss such as a freeze-up from losing utilities, water pipes breaking, fire, explosion and or another covered peril, you should have no obstacles preventing you from collecting for damages related to insured perils up to and including your insurance limits or the economic increases your policy affords. Of course, the uninsured damages will be deducted accordingly.
If you are in an area highly prone to earth movement and your carrier will not cover that peril, you should research a secondary carrier who may afford some coverage for a price you can afford. For the right price there are carriers that will take the annual gamble to insure your needs.
Earth movement due to manmade causes including but not limited to, well drilling, dynamiting, excavating and or deforestation may be successfully litigated, especially if you documented your objections in writing with proof of delivery, to any and all parties involved in such projects, including but not limited to town / city officials, the general construction company and their individual owners, subcontractors, project managing agents, land owners and the project developers. Most importantly you should consult your attorney who may attempt to secure insurance policies naming you as an additional insured for damages caused to your property by their actions, whether, negligent or as a byproduct of their operations. Refusal to protect your interests may result in your attorney having the matter heard in a court of competent jurisdiction after your counsel files a restraining order to stop all site work.
Finally, over the years we have seen such uninsured damages to our clients property who at our urging contacted their attorney and were able to recover damages caused by third parties.