Water Backup Is Not Surface Water

An Ohio subscriber recently asked the following question:

We have a carrier that is excluding a water damage claim where there is a water back-up endorsement that applies.
It states we will pay up to the amount shown in the Declaration, for direct physical loss to property covered under Section I caused by water, or water-borne material, which:
1. Backs up through sewers or drains, but not as a direct result from flood or surface water.
2. Overflows or is discharged from a:
a. Sump, sump pump; or
b. Related equipment: even if such overflow or discharge results from mechanical breakdown or off premises power failure but not as a direct result of flood or surface water.
This coverage does not apply to direct physical loss of the sump pump, or related equipment, which is caused by mechanical breakdown.
The HO3 policy states:
A. Coverage A – Dwelling And Coverage B – Other Structures
1. We insure against risk of direct physical loss to property described in Coverages A and B.
2. We do not insure, however, for loss:
a. Excluded under Section I – Exclusions;
SECTION I – EXCLUSIONS
A. We do not insure for loss caused directly or indirectly by any of the following.
Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss. These exclusions apply whether or not the loss event results in widespread damage or affects a substantial area.
3. Water Damage
Water Damage means:
a. Flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind;
b. Water or water-borne material which backs up through sewers or drains or which over-flows or is discharged from a sump, sump pump or related equipment; or
c. Water or water-borne material below the surface of the ground, including water which exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation, swimming pool or other structure; caused by or resulting from human or animal forces or any act of nature.
The company is saying that they will pay for backups through sewers or drains but not as a direct result from flood or surface water. The water came in through drains in the home. This was not a case of drains on the street backing up and flooding the home through the foundation. It seems to be a misinterpretation of policy language favoring the insurance company unfairly.
We have denied this claim due to the backup occurring as a result of the sewer filling up due to an inundation of the city's sewer system from naturally occurring rain water. There was no mechanical breakdown or power outage causing the sump pump to fail. The policy excludes water damage as noted above, regardless of any other cause or event contributing concurrently or in any sequence to the loss.
What are your thoughts on the matter?

ANSWER: Rain water is not surface water or necessarily flood water. Surface water is an accumulation of water that meanders along the ground outside of any boundaries of lakes, streams, ponds, etc. Rain water that falls into and accumulates in the sewer is not surface water, it is rain water. Flood water, like surface water, accumulates and inundates large areas of land; rain water collecting in a sewer is not necessarily flood water. The carrier is misreading the exclusion. Depending on the nature of the backup, which you have not described for me, there should be coverage.