The Texas Court of Appeals recently examined the breadth of a flood exclusion contained in a homeowners’ insurance policy. In George v. State Farm Lloyds, No. 07-12-00465-cv, 2014 Tex. App. LEXIS 5356 (Tex. App. Ct. May 19, 2014), State Farm insured Matthew George’s property, which was located near a drainage ditch. Prior to a rain storm, an unidentified third party placed large cylinders across the top of the drainage ditch. During the rain storm, the cylinders “dammed the ditch” and caused water from the ditch to overflow onto George’s property, causing approximately $46,000.00 in damage.
The State Farm Policy issued to George was subject to an exclusion barring coverage for “flood, surface waters, waves, tidal waters, overflow of a body of water, or spray from any of these, whether or not driven by wind.” George argued that the water that entered his property was neither “flood water” nor an “overflow of a body of water” because the water was diverted from the ditch onto his property through the actions of a third party.
The court upheld the policy’s flood exclusion. The court initially looked to the plain meaning of the word “flood” by examining the word’s definition in the Merriam Webster Dictionary: “a rising and overflowing of a body of water” or “overwhelming quantity or volume.” The court went on to reason that rainwater rising and escaping from the banks of a ditch constructed to hold water satisfies the plain meaning definition of “flood.” Though the water overflow was small, the court recognized that nothing in the insurance agreement specified that escaping water had to cover a certain area before it could be deemed a flood.
The insured attempted to argue that the flood exclusion should not apply because the overflow was facilitated by the presence of obstructions across the top of the ditch. The court dispelled that argument by citing to policy language preceding the flood exclusion indicating that flood losses are excluded “regardless” of “the cause of the excluded event.” The court similarly dismissed arguments by the insured that the State Farm Policy was ambiguous and that application of the flood exclusion was contrary to the intent of the parties.