State Farm’s promoting paints a comforting image for owners. On its web site, the corporate reassures policyholders that water injury is “usually coated” when a pipe bursts, when ice dams kind, or when a sewer backs up with the precise endorsement. The “not usually coated” listing sounds simple and consists of flood, floor water, tidal surge, or sewer back-up with out the endorsement. It seems to be a easy dividing line, with many doubtless decoding it as overlaying regular family plumbing mishaps however not large-scale pure disasters.
Inside courtrooms the place State Farm is preventing water loss claims throughout the nation, the truth appears to be like nothing like that neat little listing on its web site promoting. A current instance is an Arkansas case. 1 State Farm satisfied a court docket that a number of exclusions, by no means talked about in its consumer-facing advertising and marketing, worn out any probability of protection. What’s lacking from the web site in comparison with the explanations State Farm and its attorneys argue for no water injury protection is staggering.
State Farm first argued that water injury is just not coated if the leak occurs steadily. Even when the house all of the sudden floods following a sluggish leak, State Farm claims in its arguments that there isn’t a protection. In different phrases, if a hidden pipe trickled for a number of days or even weeks earlier than busting and being found, you’re out of luck. Second, State Farm persuaded the court docket that corrosion, rust, or deterioration of the pipe is a protection killer, even when the break itself seems abrupt. Third, the corporate efficiently claimed that water from a damaged pipe beneath your slab is excluded as soon as it touches soil or seeps by means of a crack within the concrete and lumps this frequent state of affairs into the identical class as pure “subsurface water.” Fourth, improper set up or development defects in a pipe resulting in water injury have been raised as one other potential bar to restoration, no matter how lengthy you’ve faithfully paid premiums. Fifth, humidity, moisture, or condensation that develops over time falls neatly into the exclusion basket as effectively.
If State Farm needed its promoting to match its litigation stance, it must rewrite its web site with brutal honesty:
- Leaks that occur over time, even a number of days, will not be coated, even when your pipe is hidden and your property all of the sudden floods with water.
- Injury attributable to corrosion, rust, deterioration, put on and tear, latent defects, or inherent vice is excluded, even when the leak appears to be like abrupt.
- Water from a damaged pipe underneath your slab that travels by means of soil or cracks within the slab is handled as “water under the floor of the bottom” and denied, irrespective of how the leak started.
- Water losses involving improper set up or development defects in plumbing or associated techniques aren’t coated.
- Humidity, moisture, or condensation that develops over time is excluded.
I couldn’t discover any of those examples of exclusions about protection in State Farm’s advertising and marketing examples. As an alternative, the corporate leaves shoppers with the impression that if a pipe bursts and water damages the house, they’re safely coated.
When the day comes and a declare is filed, the exclusions descend like a trapdoor upon State Farm’s policyholders. Their promoting invitations belief and protection. The courtroom arguments and people causes for no water injury protection ship betrayal. This isn’t a “good neighbor” means of doing enterprise.
This case needs to be a pink flag for anybody excited about shopping for a State Farm coverage. It reveals simply how little probability the typical house owner has of recovering from a water loss when the insurer is armed with an arsenal of exclusions it by no means bothered to say in its gross sales pitch. There are tons of of these kind of denials and arguments in court docket, which needs to be shared with prospects so that everyone is on truthful warning about what occurs when a State Farm policyholder suffers a water loss.
I urge policyholders and others to learn State Farm’s Movement for Abstract Judgment on this case. State Farm ought to ship it to its prospects, warning about its interpretation of its coverage limitations, earlier than losses happen.
Householders deserve transparency. They need to know the foundations of the sport earlier than catastrophe strikes. State Farm’s failure to reveal the true scope of its water injury exclusions is deceptive. It’s a warning signal flashing in pink for each potential policyholder.
Thought For The Day
“In this day of speedy dissemination of data, it’s not possible for any group to succeed for any size of time, until based upon the essential rules of absolute honesty.”
—G.J. Mecherle, founding father of State Farm
1 Sims v. State Farm Hearth & Cas. Co., No. 4:23-CV-00813 (E.D. Ark. Sept. 4, 2025). (See additionally, State Farm’s Movement for Abstract Judgment, and the Policyholder’s transient in opposition).