A decade ago, it was questionable sinkhole damages that proliferated in Florida property insurance claims. More recently, “free roof” solicitations, roof claims and thousands of lawsuits have rattled the industry.
Now comes cast iron drainpipes, common in homes built before 1975.
The pipe systems have become targets for some of Florida’s largest plaintiffs’ law firms, according to insurance attorneys, adjusters and engineers. It’s possible the pipes could lead to many more claims and suits in coming years, after Florida lawmakers took action designed to reduce roof claims and litigation.
“We’re seeing patterns. Patterns in property claims,” said Cassandra Hand-Gallegos, adjuster and CEO with CCMS & Associates in Dunedin, Fla., who spoke at the Florida Defense Lawyers Association claims conference in Orlando.
“The biggest issue is not what’s going on inside the pipes, but what’s going on with the insurance claims industry,” said David Grindley, a forensic structural engineer who also spoke at the conference.
One recent television advertisement from Orlando-based Morgan & Morgan, which calls itself America’s largest injury law firm, for example, flashes large amounts of cash that may be available to homeowners whose dwellings are more than 45 years old and which may have sewage drainage problems. Replacing the drain pipes in a home can cost $20,000 to $100,000, the Morgan & Morgan website notes.
Another claimants’ law firm, Florin Roebig of West Palm Beach, reports that some 76 million U.S. homes have cast iron pipes, “an alarming amount” of which are experiencing problems. This risk is high in Florida, with its high humidity and salt-rich soil, the firm’s website said.
Grindley and Hand-Gallegos said that many of those assertions are exaggerated. Cast iron pipes don’t often need full replacement, and there are ways to defeat erroneous or spurious pipe claims and litigation, they argue.
“Cast iron in many ways is superior to other types of material,” Grindley said. “The pipes are very rigid. They’re strong, and they don’t break if you hit them with a shovel when you’re digging in the back yard.”
In many homes, the pipes have been in use for more than a century. But they can rust to some degree and may develop deposits on the inside that can constrict the flow of drain water, something that a growing number of claims have attempted to capitalize on, he said.
Grindley said many insurance claims start with a clogged kitchen sink. In a number of cases his firm has investigated, the homeowners, the public adjusters or plumbing contractors have claimed that mold and mildew under sinks is the result of backed-up cast iron pipes.
More likely, he said, the growth is from years of leaks in plastic sink drains or supply lines, or from seepage around the edge of the basin.
One way to tell if the blockage is in the main drain pipe beneath the house or underneath the sink is to see where the overflow began. A backed-up main drain line will force water up through the lowest opening first, Grindley explained. If the sink, 36 inches above the floor, is overflowing but the floor-level shower drain is not, it means the sink drain is clogged, not the drain lines for the whole house.
For that reason, it’s important for insurance adjusters to quiz homeowners, when possible, on where and when the backup was spotted.
“Always ask: Where was the claimant at the time of the overflow? Where were they standing? in the kitchen? In the bathroom?” Grindley said. “If they say, ‘the kitchen,’ then, we’re skeptical that it’s the main drain line.”
Another rule of thumb: Household drain lines don’t hold that much water. If the entire house is flooded, it’s probably the result of a supply line or an outside source of water—not a clogged drain pipe.
Many homeowner policies exclude water-pipe losses altogether. Others exclude damage due to gradual leaks. Despite the use of those endorsements, however, non-weather water claims and litigation appear to be on the rise in Florida and have resulted in a number of appeals court rulings in recent years—some for insurers, some against. The exact wording of the policy endorsement is often at issue.
To investigate and defend cast-iron pipe claims, Grindley and Hand-Gallegos offered several other rules that insurance companies and their adjusters and experts should follow:
- Inspect the home carefully. This may require a video inspection inside the drain lines to determine the condition of the pipes and to find any obstruction. Check vent and stack pipes for proper air flow. Map the location of pipes.
- Request building permits to help determine if plumbing installation and repairs were done correctly. Check the claims history. Report to the carrier all information that was not made available.
- Determine if the blockage can be easily rectified. In most cases, clogged lines can be cleared with a water jet or with a root-cutting device or a simple auger. (But be prepared to quickly clean up any water that may overflow from the procedure.)
- And if cast iron pipes are occluded, that doesn’t mean the entire system has to be replaced. Many times, pipes can be cleaned, then lined with polymer sleeves that will last for decades.
- Be prepared to counter the “hydrostatic test” often employed by plaintiffs’ experts. The test purports to check for leaks in a drain system by stoppering outlet points and filling the pipe with water, Grindley explained. If the water level drops in a relatively short amount of time, it can indicate a leak. Grindley said the test is misleading and will almost always show “leakage” because drain lines are not normally pressurized and don’t face those conditions in everyday usage.
- Beware of add-on damages or “last-resort” claims, such as “contaminated or damaged soil” around the pipes. “Soil is soil. Is it contaminated just because sewage came in contact with it?” Grindley asked. “You can put some lime on it and 24 hours later you’re good to go.”
- If it is determined that the drain pipes do, in fact, need replacing, consider rerouting them around the outside of the home, instead of undertaking the disruptive and expensive method of having to cut through the concrete slab in several rooms.
And watch for claimants’ expert plumbers who report that full pipe replacement is necessary, when those plumbers have a vested interest in doing the work. Grindley quoted from one plaintiff plumber’s report that said the system would soon fail simply because it was 66 years old.
“Anyone here 66 years old or greater?” he asked the crowd of insurance defense lawyers and adjusters. “Have you failed?”
(This article was originally published by Insurance Journal in late June. Reporter Will Rabb is the Southeast Editor of Insurance Journal)