Flood Exclusion Applicable When Proximate Cause Of Loss

Commercial Property	Vandalism
Water Damage	Exclusion

The owner of a go-cart track and golf cart sales operation experienced a water damage loss due to a flood. The loss occurred when a vandal(s) removed sandbags and dirt from a nearby levee, causing the levee to flood the surrounding area.

The property owner submitted a claim to their commercial property insurer, who subsequently denied coverage based on the policy's exclusion of flood/water damage. In the legal suit, the district court ruled in favor of the insurer. It stated that the flood/water damage exclusion was unambiguous, and there was no coverage.

The insured appealed the decision because the proximate cause of loss was not flood, but vandalism, which is a covered peril. Thus, the policy should respond.

The decision of the United States District Court for the Eastern District of Missouri affirmed the decision of the district court. It was in favor of the insurer based on the policy language. The policy language was clear regarding the flood water damage exclusion, which in effect stated that there was no coverage for flood, whether caused directly or indirectly by the following. This type of loss or damage was excluded from the policy regardless of any other cause or event that contributed concurrently or in any sequence to the loss.

TNT Speed & Sport Center, Inc. d.b.a. TNT Golf Cars & Utility Systems, Appellant v. American States Ins. CO., Appellee. United States District Court for the Eastern District of Missouri. 8th Cir. No. 96-2303. May 27, 1997. CCH 1997 Fire and Casualty Cases, Paragraph 6136.