In the Ninth Circuit's subsequent affirmance of a 2024 District Court in a case out of Washington State, the focus remained on the insurance policy's exclusion of loss caused by any underground water. The importance of the case is, with all respect to Washington State law, the Court's focus on the precise language of the exclusion in the policy before it, despite the Court's previous holding that other exclusions would also apply in the case at bar:
Both “improper compaction” and “earth movement” are “Losses Not Insured” under the Kaufmans’ policy with State Farm. Even accepting arguendo that the “improper compaction” exclusion is subject to an ensuing loss provision, the “water ... below the surface of the ground” exclusion otherwise operates to preclude coverage. The policy’s plain text excludes loss caused by any underground water. The term “water” in the relevant exclusion is modified only by the phrase “below the surface of the ground” and the provision does not otherwise exempt or distinguish underground water released by specific sources. The Kaufmans’ loss is, therefore, excluded in any event.
Kaufman v. State Farm Fire & Cas. Co., No. 23-35424, 2024 WL 3508054, at *1 (9th Cir. July 23, 2024) (emphasis by the Court).
Underground water exclusions of the kind at issue in Kaufman are discussed in the reported cases assembled in § 7:7 of Volume 1, CATASTROPHE CLAIMS / INSURANCE COVERAGE FOR NATURAL AND MAN-MADE DISASTERS (Thomson Reuters November 2024 Edition, 2025 Edition forthcoming).
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