WATER-CAUSED SOIL MOVEMENT HELD TO EXCLUDE DWELLING FLOOD DAMAGE CLAIM 490_C007
WATER-CAUSED SOIL MOVEMENT HELD TO EXCLUDE DWELLING FLOOD DAMAGE CLAIM

Insureds' claim for building damage under their dwelling policy issued under the National Flood Insurance Program (NFIP) was denied, whereupon they brought an action to recover their loss. NFIP responded with a motion for summary judgment, contending that the insureds did not establish a "direct physical loss" as covered in the policy and defined as a loss "directly and proximately caused by a 'flood'."

The federal district court noted that there were express exclusions in the policy for loss caused by "land sinkage, land subsidence or movement of land resulting from the accumulation of water in subsurface land areas." Noting further that foundation damage is covered only when directly caused on the date of loss by flood waters, the court was persuaded by opinions and conclusions of other federal courts, as follows:

. . . "As the courts have all but universally held, federal flood insurance policies do not cover losses stemming from water-caused earth movements." Wagner v. Director, Federal Emergency Management Agency, 847 F.2d 515, 522 (9th Cir. 1988).

. . . "The standard flood insurance policy does not provide coverage for losses caused by earth movement even if such movement is caused by flooding." Sodowski v. National Flood Insurance Program, 834 F.2d 653, 657-59 (7th Cir. 1987).

. . . "Policy does not cover loss by earth movement in the form of soil settlement regardless of whether this settlement has been in the process over a period of time or whether it occurred immediately after the flood." West v. Harris, 573 F.2d 873, 877 (5th Cir. 1978).

The court dealing with the matter at hand found persuasive the analyses made by the three courts on the precise issue. The conclusion was bolstered here by a report by an inspection company, retained by NFIP, that the damage " . . . was a result of settlement due to inadequate construction on poor soil type, not flooding."

The motion for summary judgment in behalf of the National Flood Insurance Program was granted.

HARPER ET AL., Plaintiffs v. STICKNEY, Defendant. United States District Court, Eastern District of Missouri. No. 4:92CV02147 GFC. November 18, 1994. CCH 1995 Fire and Casualty Cases, Paragraph 5224.