October 2026, by Aaron Jacob, Esq.
Water damage is one of the most common types of property insurance claims and can occur for a variety of reasons, including from a major storm, a water main break, a burst pipe, plumbing issues, drain backups, or just rain through an open window. Standard homeowners and commercial property policies generally cover sudden water damage, but nearly all of them exclude damage caused by “flood” and “surface water,” which is typically insured separately, if at all, through a flood policy or coverage form. Policies can also exclude water damage caused by ice, subsurface water, or sewer, drain, or plumbing issues. Because of this, water damage claims are also one of the most frequent types of claims that are denied, so if an insured wakes up to find a basement filled with water, their insurer will often try to deny the claim by labeling the water intrusion as a “flood” or “surface water.”
Under New York law, whether that label is correct depends on where the water came from, how it reached the property, and, above all, the exact wording of the policy. New York courts have enforced these exclusions where natural water, such as rain or an overflowing stream, infiltrated a property, but they have also refused to apply them to water from man-made sources, such as a broken water main or a burst pipe. Courts have also read undefined terms like “flood” according to their ordinary meaning, and not as broadly as an insurer might prefer.
If your insurer has denied your water damage claim as a “flood” or “surface water” loss, don’t navigate the complex claims process alone. Please contact us right away for a free assessment.
This article provides an analysis of how courts define “flood” and “surface water,” including how they treat water from man-made sources, the difference between surface water and rain, how the exact policy wording can decide the outcome, and an on-point New Jersey decision on the meaning of “flood.” This is Part 1 of a two-part series on water damage coverage, and Part 2 will address sewer and drain backups, plumbing overflows, sump pumps, and the backup endorsements that often cap those losses.
Defining “Flood,” “Rain,” and “Surface Water”
Although the terms are often used together, “flood,” “surface water,” and “rain” are distinct. A “flood” is generally understood as water that escapes from a body of water or a watercourse, such as a river, stream, lake, or reservoir.1 “Surface water,” by contrast, is water that diffuses over the land without forming a body of water or following a defined channel, such as from rain or melting snow.2 “Rain,” in turn, is water falling from the sky.3 However, once rain reaches the ground and begins to flow over or collect on the land, it may transform from “rain” into “surface water.”4 Both flood water and surface water are “terranean,” or on the surface of the ground, as opposed to “subterranean,” or below the surface.5
New York courts have adopted similar definitions. To this end, where a policy does not define “surface water,” courts have given it its plain meaning: “the accumulation of natural precipitation on the land and its passage thereafter over the land until it either evaporates, is absorbed by the land or reaches stream channels.”6 The First Department has explained that “flood,” given its ordinary meaning, “connotes an inundation; a deluge.”7
Accordingly, when an insurer denies a water damage claim as “flood” or “surface water,” the key questions are generally:
(1) where the water came from, i.e., a natural source, such as rain or an overflowing body of water, or a man-made source, such as a water main or pipe;
(2) how the water reached and entered the property, i.e., over the surface of the ground, from below the ground, or through pipes; and
(3) how the policy defines the excluded terms, and whether the exclusion contains broader language, such as “regardless of its source.”
I. Natural Water vs. Man-Made Sources: Water Main Breaks and Burst Pipes
One distinction in this area is between natural water and water from man-made sources. New York courts have repeatedly held that “flood” and similar water exclusions are aimed at natural phenomena, and do not reach water released by a broken water main or pipe.
For example, in Popkin v. Security Mutual Insurance Co., a city water main under a Manhattan street broke, sending large amounts of water into the street, backing up the sewers, and flooding the insured building’s yard and basement. The insurer relied on an exclusion for “flood, surface water, waves, tidal water,” and the “overflow of streams or other bodies of water.” The First Department rejected that position, holding that the term “flood” “does not encompass water damage sustained as the result of a broken water main.”8 The Court also rejected the insurer’s reliance on the policy’s sewer backup exclusion, because the water did not back up through the sewers independently of the water main break; rather, “[i]t was the water main break itself which caused the damage and as a corollary caused the backup of the sewers.”9
The First Department later explained in a different case that exclusions for floods, tidal waves, seeping ground water, and the like “preclude only recovery for damages arising from natural causes, not from artificial devices.”10 Similarly, it has held that a flood exclusion “did not apply where a pipe had burst.”11 The Court of Appeals affirmed a Third Department decision that likewise held that an exclusion for “water below the surface of the ground” applies only to water that is below the ground “as a result of natural causes, and not water which happens to be found below the surface as a result of artificial devices such as pipes.”12 As the Court explained, any other reading would mean that a leak from a plumbing system would be covered if the pipe was above ground, but excluded if the same pipe was below ground.13
The same principle applies to undefined “surface water” exclusions. In Smith v. Safeco Insurance Co., a water main broke in the street and flooded the insured’s home. Because the policy did not define “surface water,” the Fourth Department applied its plain meaning, which refers to natural precipitation, as described above, and refused to find that water from a broken water main was surface water. The insured was granted summary judgment, even though the exclusion stated that it applied whether the water was caused by human forces or “any act of nature.”14
In response, some insurers have drafted around these decisions and broadened their water exclusions considerably. For example, in Platek v. Town of Hamburg, the policy excluded loss caused by “[w]ater . . . on or below the surface of the ground, regardless of its source.” The Court of Appeals held that this language unambiguously excluded a basement flood caused by a ruptured water main abutting the insureds’ property, and further held that the policy’s ensuing loss provision could not be used to restore coverage for what was essentially a flood.15
Policyholders should be aware that the natural-versus-man-made distinction is not unlimited. Where a man-made structure designed to contain a body of water fails, courts may still treat the resulting overflow as a flood. For example, the Third Department held that water released when a dike, or levee, gave way was a flood under a policy defining flood to include the “rising (including overflowing or breaking of boundaries) of lakes, reservoirs, rivers, streams or other bodies of water,” explaining that it was “irrelevant that a defect in the dike may have also contributed to the break.”16
Key takeaway: If your water damage came from a broken water main, a burst pipe, or another man-made source, a “flood” or “surface water” denial may be wrong. Read the exact exclusion: unless it reaches water “regardless of its source” or contains similar language, New York courts have generally limited these exclusions to natural water. Document the source of the water immediately, including utility or municipal reports of the water main break and photographs of where the water entered.
II. “Surface Water” vs. “Rain”
Many policies distinguish between “rain” and “surface water.” Generally, damage from water falling from the sky directly onto or into a building is considered “rain,” while water flowing on the ground onto the property or into a building is considered “surface water,” even if that water accumulated on the ground from rainfall.17
For example, in Casey v. General Accident Insurance Co., rainwater accumulated at the lowest point of the insured’s backyard and entered the home. The Fourth Department held that the water was surface water within the policy’s exclusion, and that the fact that a clogged drain and the slope of the roof may have contributed to the loss was “of no consequence” under the policy language.18
By contrast, where rain collects somewhere other than the ground, such as on a roof, the analysis can change. In a recent case, rain ponded on a commercial building’s roof because its interior drains were clogged, and then leaked into the building. The Fourth Department noted that it remained an open question whether pooled rainwater is still “rain,” and held that the insurer failed to establish that rain was the “proximate, efficient and dominant cause” of the loss, given the clogged drains and other potential causes.19 The interplay between rain, drains, and backups is addressed further in Part 2.
Key takeaway: Where water collected and how it entered the building matter. Water that flowed over the ground and into a basement is more likely to be treated as surface water; water that entered through a roof, a drain, or the plumbing may fall outside a surface water exclusion entirely.
III. When a Flood Causes a Backup: The Policy Language Controls
Insurers frequently argue that a flood or surface water exclusion bars coverage even where the water ultimately entered through a drain or a sewer. Whether that argument succeeds again depends on the policy language and the facts.
In B & W Heat Treating Co. v. Hartford Fire Insurance Co., the policy covered damage “solely caused by water that backs up from a sewer or drain,” but an endorsement excluded damage “caused by any flood,” defined as “the overflow of surface water, streams or other bodies of water, or their spray.” Where flooding caused water from a clogged drain to back up into the property, the Fourth Department held that the loss was excluded, explaining that the contribution of a clogged drain was “of no consequence under the language of the policy.”20
Importantly, however, the court in B & W treated the event as a flood without analyzing whether heavy rain alone, without the overflow of any body of water, would qualify. As discussed below, a federal court in New Jersey recently addressed that exact question under nearly identical policy language and reached a different and more policyholder-favorable result.
IV. New Jersey Considerations
In G.E.M.S. Partners LLC v. AmGUARD Insurance Co.,21 sewer water backed up into the insured’s buildings in Union, New Jersey during Hurricane Ida. The policy’s “Water Back-Up and Sump Overflow Endorsement” covered damage from water that “backs up through or overflows or is otherwise discharged from a sewer,” but excluded coverage for backups “caused, directly or indirectly, in whole or in part, by any flood.”22 The policy defined flood as “the overflow of surface water, waves, tides, tidal waves, streams, or other bodies of water.” The insurance company argued that the hurricane’s rain overwhelmed the municipal sewers and therefore amounted to a “flood.”23
The U.S. District Court for the District of New Jersey disagreed and denied the insurer’s motion for summary judgment. The Court instructively held that, as used in that exclusion, “flood” means “the overflow of . . . a bod[y] of water.” The Court based its decision on dictionary definitions, a leading insurance law treatise’s definition of flood, and the structure of the definition itself. The Court further explained that the word “overflow” (in the policy definition of “flood”) implies a boundary that water flows over, and the phrase “or other bodies of water” signals that each listed item is itself a body of water, just as a sentence listing “dogs, cats, bats, and other animals” makes clear that the bats are animals, not baseball bats.24 Therefore, rain hitting city streets and overwhelming municipal sewers, without causing any body of water to overflow, was not a flood.25
The Court distinguished an earlier New Jersey decision involving a policy that defined flood to include “the accumulation of surface water,” noting that such language might well have applied to the storm, and that the case “might have come out differently under a different insurance contract.”26 The Court also followed the New Jersey Appellate Division’s holding that an undefined “surface water” exclusion is ambiguous, and that the term can reasonably be read to mean water of a permanent nature, akin to a body of water, rather than rainwater running across the land.27
Key takeaway: The difference between “the overflow of surface water” and “the accumulation of surface water” can decide a storm-related claim. Before accepting a flood denial, compare the exact definition in your policy, and determine whether any body of water actually overflowed.
If your water damage claim is denied as “flood” or “surface water,” confirm:
• The exact wording of the exclusion and any definitions, including whether it reaches water “regardless of its source,” or the “accumulation” (rather than the “overflow”) of surface water;
• Where the water came from (rain, an overflowing body of water, a water main, or a pipe), and any utility, municipal, or 311 reports documenting the source;
• How and where the water entered the building (over the ground, through a foundation, through a roof, or through a drain or plumbing fixture); and
• Whether any endorsement, such as a water backup endorsement, provides coverage for the way the water entered, and whether it contains its own flood exclusion.
Aboulafia Law Firm LLC works exclusively on behalf of policyholders and has decades of experience fighting insurance companies. Whether you are dealing with a residential or commercial property claim, we are ready to help you. If your insurer has denied your water damage claim as a “flood” or “surface water” loss, don’t navigate the complex claims process alone. For assistance on your insurance claim, please contact us.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
Footnotes
1. 11 Couch on Insurance § 153:49 (3d ed.). ↩
2. Id.; 11 Couch on Insurance § 153:50 (3d ed.). ↩
3. Couch § 153:50. ↩
4. Id. ↩
5. Couch § 153:49. ↩
6. Smith v. Safeco Ins. Co. of Am., 159 A.D.3d 1536, 1537–38, 72 N.Y.S.3d 716 (4th Dept. 2018) (quoting Casey v. General Acc. Ins. Co., 178 A.D.2d 1001, 1002, 578 N.Y.S.2d 337 (4th Dept. 1991)). ↩
7. Popkin v. Security Mut. Ins. Co. of N.Y., 48 A.D.2d 46, 47–48, 367 N.Y.S.2d 492 (1st Dept. 1975). ↩
8. Id. ↩
9. Id. ↩
10. Ender v. Nat’l Fire Ins. Co. of Hartford, 169 A.D.2d 420, 421, 563 N.Y.S.2d 85 (1st Dept. 1991). ↩
11. Rovelli v. Allstate Ins. Co., 38 A.D.3d 241, 242, 831 N.Y.S.2d 150 (1st Dept. 2007). ↩
12. Cantanucci v. Reliance Ins. Co., 43 A.D.2d 622, 623, 349 N.Y.S.2d 187 (3d Dept. 1973), aff’d, 35 N.Y.2d 890 (1974). ↩
13. Id. ↩
14. Smith, 159 A.D.3d at 1537–38. ↩
15. Platek v. Town of Hamburg, 24 N.Y.3d 688, 694–97, 26 N.E.3d 1167, 3 N.Y.S.3d 312 (2015). ↩
16. E. B. Metal & Rubber Indus., Inc. v. Federal Ins. Co., 84 A.D.2d 662, 662–63, 444 N.Y.S.2d 321 (3d Dept. 1981). ↩
17. Couch § 153:50. ↩
18. Casey, 178 A.D.2d at 1002. ↩
19. John Mezzalingua Assocs., LLC v. Travelers Indem. Co., 211 A.D.3d 1553, 1557–58, 182 N.Y.S.3d 408 (4th Dept. 2022). ↩
20. B & W Heat Treating Co. v. Hartford Fire Ins. Co., 23 A.D.3d 1102, 1102–03, 803 N.Y.S.2d 870 (4th Dept. 2005) (quoting Casey, 178 A.D.2d at 1002). ↩
21. A case litigated by this firm with local New Jersey co-counsel. ↩
22. G.E.M.S. Partners LLC v. AmGUARD Ins. Co., 742 F. Supp. 3d 410, 412 (D.N.J. 2024). ↩
23. Id. ↩
24. Id. at 413–15. ↩
25. Id. at 413, 416. ↩
26. Id. at 416–17 (distinguishing Villamil v. Sentinel Ins. Co., 356 F. Supp. 3d 418, 419–20 (D.N.J. 2018)). ↩
27. Id. at 419–21 (discussing Sosa v. Massachusetts Bay Ins. Co., 458 N.J. Super. 639, 650, 206 A.3d 1011 (App. Div. 2019)). ↩
