Homeowners Insurance - Coverage Question/Old Septic Tank

[sdemicco4]

New Jersey - we were denied a claim a few months back because they categorized the issue as a sink hole caused by earth movement. Now that we are in the process of filling the hole we found that the collapse is due to an old septic tank that was obviously not removed properly. The hole/collapse happened under an porch extension on the back of our home and luckily the floor of the porch didn't cave in. We have only lived in our house for just over a year and the house was built in 1958. We are wondering if now that we know the root cause of the collapse if its something the insurance company would not cover due to the removal of the septic being done incorrectly, leading to the hole. We have a very unhelpful and frankly, useless, homeowners insurance company so I'm hoping to find out some opinions before I have to engage with them again. It was painful.

Thanks!

 

[adjusterjack]

My comments are based on the ISO policy form HO 3 Edition of May 2001. Many HO policies are similar but not identical so you will have to read yours to see if it contains the same wording.

The HO 3 specifically excludes Earth Movement. The following is quoted from the policy:

2. Earth Movement
Earth Movement means:
a. Earthquake, including land shock waves or tremors before, during or after a volcanic eruption;
b. Landslide, mudslide or mudflow;
c. Subsidence or sinkhole; or
d. Any other earth movement including earth sinking, rising or shifting;

The denial based on sinkhole was proper since sinkhole was presumed at the time.

However, now that you know the actual cause, we look to another part of the policy for coverage. The only one that comes close is the Collapse coverage. Unfortunately, since your porch did not actually collapse, the Collapse coverage doesn't help you. Again, from the policy:

8. Collapse
a. With respect to this Additional Coverage:
(1) Collapse means an abrupt falling down or caving in of a building or any part of a building with the result that the building or part of the building cannot be occupied for its current intended purpose.
(2) A building or any part of a building that is in danger of falling down or caving in is not considered to be in a state of collapse.
(3) A part of a building that is standing is not considered to be in a state of collapse even if it has separated from another part of the building.
(4) A building or any part of a building that is standing is not considered to be in a state of collapse even if it shows evidence of cracking, bulging, sagging, bending, leaning, settling, shrinkage or expansion.

Beyond that, the condition of the septic tank itself is likely a maintenance/wear and tear issue that is also excluded.

Sorry, but if you want to shore up the porch, remove the septic tank, and fill in the hole, you're on your own.

We have a very unhelpful and frankly, useless, homeowners insurance company

Yeah, I used to get told that a lot when I gave bad news to a policyholder.