A month after a massive water-main break in East Baltimore damaged and destroyed dozens of homes, residents have discovered that their insurance will not pay for the worst of their losses and the city might not either.
Their plight -- a homeowner's nightmare -- has exposed a threat to property owners throughout Baltimore and other cities where aging underground pipes are liable to break without warning.
Even the most comprehensive insurance policies do not cover the type of scenario that occurred May 10 when surging water on Homewood Avenue near Green Mount Cemetery damaged dozens of homes, undermining 15 rowhouses so severely that they had to be demolished.
The city, meanwhile, has declined to say whether it will pay for the damage, pending its investigation into the cause of the break.
"It's devastating to find out you've been paying insurance premiums all these years and something of this magnitude happens and you're not covered," said Nomia Crudup, whose row-home of 47 years was demolished.
Crudup had only basic coverage for fire and explosion. But even the most complete homeowner policies contain exclusions that enable insurance companies to deny claims stemming from damage caused by a broken city water pipe.
Some insurance companies, citing a common exclusion for "earth movement," say they will not pay for damage to a foundation undermined by rushing water. Although these companies will pay for water damage to the contents of homes, they won't pay for the house if it has to be demolished.
At least one company has denied several claims from the Homewood Avenue area, arguing that the pipe break created a "flood" whose damage is covered only by federal flood insurance. Few people living in the inner city, well beyond the boundaries of a 100-year flood plain, ever purchase costly federal flood insurance.
But underwriters who handle federal flood insurance question whether damage from a city pipe break would be covered under a flood policy. Unless heavy rains and storm drainage caused the pipe to break, the underwriters say, federal flood insurance likely would not pay.
No 'absolute coverage'
"There is no [policy] that I'm aware of that gives absolute coverage," said Paul Roth, a claims superintendent for State Farm Insurance Co. "I don't know of anything that you can buy."
Meanwhile, the city is positioning itself to avoid liability. From the outset, city officials have speculated that warming weather caused the ground to shift and the pipe to break. If that is true, legal experts say, the city could claim -- as other cities have -- that the pipe break was an "act of God" beyond the scope of its responsibility.
If, however, the city had been warned of problems that it failed to fix or if it actually caused the pipe to break, then it could be held liable, city attorneys acknowledged.
City Solicitor Otho M. Thompson declined to comment for this article, citing the pending investigation. A meeting is scheduled for tomorrow at which the city might decide whether to pay claims, Thompson said.
At least a few residents of the low-income neighborhood say they are hopeful the city will pay. "Workers have told me the city was at fault, but I just don't know," said Natalie Cummings, who is seeking $20,000 for an uninsured rental property that was demolished. "I'm just up in the air."
The city has more than 1.8 million pieces of pipe throughout its 3,400-mile network of water lines, most of which are cast-iron and more than 50 years old. The city averages more than one pipe break a day, though most breaks are small and cause little damage.
It is extremely uncommon for very large mains to rupture, although in the past few years, New York, Philadelphia and Chicago have experienced such breaks.
A 40-inch main ruptured at Lombard and Light streets in downtown Baltimore in January 1980, damaging the street but not the foundations of nearby buildings.
"If it wasn't unusual, it wouldn't be news," said Kurt Kocher, a spokesman for the Department of Public Works. "You probably have a better chance of being hit by lightning."
Still, city officials privately acknowledge that they're fearful of setting a precedent by paying for the damage caused by the pipe break. The city has taken a firm position against routinely paying damages in a variety of claims, as have many other municipalities.
"No one can expect any municipality to open up the streets to look to see if there is about to be a water-main break," said Eugene Borenstein, an attorney for New York City. "Unless the city has notice or was involved in something to cause it, there is no liability. We don't readily pay on water-main breaks."
If the city denies the claims, property owners, unable to buy adequate insurance at any cost, could find themselves gambling against the remote odds that a major pipe break could wipe out their investments.
Assembly could step in