In wake of insurance fiasco, Richardson resident works to close loophole that withholds manmade flood incidents from coverage

Ken Hutchenrider said his ground floor was destroyed by a 3-foot wall of water that flooded his home after a water transmission line broke Aug. 30 in Richardson.

Ken Hutchenrider said his ground floor was destroyed by a 3-foot wall of water that flooded his home after a water transmission line broke Aug. 30 in Richardson.

A Richardson resident whose home sustained at least $100,000 worth of flood damage after a water main ruptured last week near Breckinridge Park is working with legislators to close a loophole that withholds manmade flood events from coverage by homeowners insurance.

"There is a [homeowners insurance coverage] gap there that somehow is going to have to be closed for everybody ... You’ve got these pipes that, god forbid, tomorrow could re-repture again," Ken Hutchenrider said.

The water district said between 15 to 20 homes sustained varying degrees of damage from the Aug. 30 incident. In hopes of preventing this from happening again to himself and others, Hutchenrider said he is working with State Sen. Van Taylor and State Rep. Jeff Leach to introduce legislation that closes the loophole.

The pipe that ruptured in Richardson is one of two major North Texas Municipal Water District transmission lines that services the cities of Richardson, Garland, Murphy, Plano, Sachse and Wylie. An investigation by a third party firm into the cause of the incident is ongoing.

According to Hutchenrider, his homeowners insurance policy offered the most extensive coverage option available, yet it still did not protect his home from events of this nature. Because his neighborhood is not in a floodplain, he said residents living there are not eligible for flood insurance. Even if his home was covered by flood insurance, Hutchenrider said it would not have covered a "manmade" incident.

And the water district's insurance carrier said it is also unable to provide coverage. In an email sent to affected homeowners Sept. 7, the Texas Water Conservation Association Risk Management Fund—a state-run liability insurance group that covers Texas water districts—stated that as a government entity it is bound by the law from covering incidents such as what occurred last week at the 4500 block of Crystal Mountain Drive.

"Moreover, under the Texas Constitution, a public entity may not use public funds to pay private
claims where, as here, it is immune ... We cannot in good faith pay you any money in response to your claim," the email said.

The letter also claims that Texas law mandates a governmental entity "only be liable for property damage caused by the wrongful act or the negligence of an employee acting within the scope of his employment." The letter used damage caused by negligent operation of a motor vehicle as an example of an exception to this law.

The North Texas Municipal Water District reinforced the TWCA Risk Management Fund's reasoning for denial of coverage in a comment provided this afternoon to Community Impact Newspaper. 

"We understand this notification from the district’s insurance administrator is disappointing news, and we recognize the hardships caused by the water pipeline break ... Like a city, NTMWD is a governmental entity subject to laws that govern when and to what extent the district may use public funds to pay damage claims for private property ... We encourage affected homeowners to notify their insurance provider of this determination and seek their assistance with coverage," the statement said.

The district said it is continuing to work with homeowners to reimburse for expenses tied to temporary relocation.

Thankfully for Hutchenrider, his homeowners insurance company has agreed to pay his claim; however, he said many of his neighbors have not been as lucky.

"No one knows yet why [the pipe] would have ruptured to that point," he said. "We [residents who live close to the line] could be sitting on a ticking time bomb that could go off that we just don't know about."

Community Impact Newspaper will continue coverage of this story as more is announced.

A link to the full version of the email sent by the TWCA Risk Management Fund is available below. Please note: Certain pieces have been redacted to protect personal information.
By Olivia Lueckemeyer
Olivia Lueckemeyer graduated in 2013 from Loyola University New Orleans with a degree in journalism. She joined Community Impact Newspaper in October 2016 as reporter for the Southwest Austin edition before her promotion to editor in March 2017. In July 2018 she returned home to the Dallas area and became editor of the Richardson edition.


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