State Farm’s promoting paints a comforting image for householders. On its web site, the corporate reassures policyholders that water injury is “sometimes coated” when a pipe bursts, when ice dams type, or when a sewer backs up with the fitting endorsement. The “not sometimes coated” record sounds simple and contains flood, floor water, tidal surge, or sewer back-up with out the endorsement. It seems to be a easy dividing line, with many probably deciphering it as overlaying regular family plumbing mishaps however not large-scale pure disasters.
Inside courtrooms the place State Farm is combating water loss claims throughout the nation, the fact appears nothing like that neat little record 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, 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 shouldn’t be coated if the leak occurs step by step. Even when the house instantly floods following a sluggish leak, State Farm claims in its arguments that there isn’t any 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 way of a crack within the concrete and lumps this widespread situation into the identical class as pure “subsurface water.” Fourth, improper set up or building 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 wished 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, aren’t coated, even when your pipe is hidden and your property instantly floods with water.
- Injury brought on by corrosion, rust, deterioration, put on and tear, latent defects, or inherent vice is excluded, even when the leak appears abrupt.
- Water from a damaged pipe beneath your slab that travels by way 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 building defects in plumbing or associated methods 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 examples. As an alternative, the corporate leaves customers 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” manner of doing enterprise.
This case ought to be a purple flag for anybody serious about shopping for a State Farm coverage. It reveals simply how little probability the common 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 lots of of a majority of these denials and arguments in court docket, which ought to be shared with prospects so that everyone is on honest 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.
Owners deserve transparency. They should 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 purple for each potential policyholder.
Thought For The Day
“In at the present time of speedy dissemination of knowledge, it’s inconceivable for any group to succeed for any size of time, until based upon the fundamental ideas 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).
