Legal Question in Insurance Law in California

My neighbor's water heater malfunctioned and leaked. The leak caused water damage to my condo, which amounted to about $1,500 for repair and mold removal. The neighbor subsequently repaired the leak upon me notifying her of the water damage.

The neighbor's insurance company, Farmers, has declined to take liability for this damage. They claim that their insured (my neighbor) was not negligent in any way, and therefore she is not legally liable for the damage. They claim that their insured had just had the water heater checked only 3 months prior to the leak by a plumbing company who said everything was ok. They provided the name of the plumbing company as TLC Plumbing. They claim that because of these facts, they do not believe their insured was negligent in any way, and therefore, she is not legally liable. In this regard, Farmers insurance writes in a letter:

"Our insured's policy provides liability coverage if the facts of the loss clearly show our insured is legally liable. The investigation indicated our insured was not negligent and would not be liable for this loss. We regret you incurred this loss, but believe the claim was handled appropriately and the denial is proper."

Is a neighbor liable if their water heater malfunctions and causes water damage to an adjacent neighor's condo? Or is the insurance company correct in stating that the neighbor was not negligent, and therefore is not legally liable?


Asked on 5/24/12, 5:30 am

1 Answer from Attorneys

You have already asked this question and had it answered. The answer does not change. A person is not automatically liable if their water heater leaks and damages other peoples property. They must have been careless in some way in causing the leak (or have caused it intentionally), otherwise they are not responsible. In law "careless" is called "negligent" and "responsible" is called "liable." (That's a big oversimplification, but close enough for this purpose). Insurance companies only cover claims where their insured was negligent. So if your neighbor was not negligent, as Farmer's has concluded, then Farmer's owes no duty to provided coverage for the loss. As for whether Farmer's is right that your neighbor was not negligent, there is no way for us to say based on an internet question. It certainly SOUNDS like they were not negligent. They had the heater checked quite recently, which is more than most people do. TLC may have been negligent in doing the inspection, but that is not something your neighbor is liable for. You would have to make a claim against TLC for their negligence. I suppose it's also possible that your neighbor did something negligent to the heater after TLC's inspection, but you don't provide any facts to support that idea. The bottom line is that unless you have facts that show your neighbor did something wrong, or failed to do something they were obligated to do, which caused the leak, they are not liable to you and Farmer's is right.

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Answered on 5/24/12, 2:49 pm


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