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35 145 University Avenue West, St. Paul, ININ 55103-204-1 Phone: (651) 281-1200 • (800) 925-1122 L TDD (651) 281-1290 eeague'of Minnesota Cities DIC Far: (651) 281=1299 • L\ICIT Fax: (651) 281-1298 Cities promoting excanance Web Site: http://VAVW.Imnc.org November 28, 2000 To: Member cities and agents From: LMCIT Board of Trustees Re: Optional "no-fault" sewer back-up coverage LMCIT now offers member cities "no-fault" sewer back-up coverage. This new optional coverage will reimburse a property owner for up to $10,000 of clean-up costs and damages caused by a sewer back-up, irrespective of whether the city was negligent or legally liable for those damages. This new coverage option is intended to do several things: • To reduce health hazards by encouraging pro ert owners to get back-ups cleaned up as quickly as possible. • To reduce the frequency and severity of sewer back-up lawsuits. I.e., property, owners may be less inclined to sue if they receive conciliatory treatment at the time of the back-up. • To give cities a way to address the sticky political problems that can arise when a property owner learns that the city and LMCIT-won't reimburse him for his sewer back-up damages because the city wasn't negligent and is therefor not legally liable. Many cities and their citizens may find this new coverage option to be a helpful tool. However, it's also important to realize that it's not a complete solution to sewer back-up problems, and that not every possible back-up will be covered. What sewer back-ups would be covered by the new coverage? The no-fault coverage would reimburse the property owner for sewer back-up damages, regardless of whether the city was legally liable, if the following conditions are met: The back-up must have resulted from a condition in the city's sewer system or lines. • A back-up caused by a clog or other problem in the propert y owner's own line would not be covered.