Withing the coverage of "all-risk" homeowner's insurance policies is a clause providing coverage against direct loss caused by: "collapse of building or any part thereof."
What Constitutes "Collapse" within the Policy?
The question of whether a particular loss or damage to the insured building is within the meaning of the clause appears to turn on two overriding considerations.
The first is the form of the clause. Under some policies, insurance is provided against direct loss caused by "collapse" without definition of that term by qualification or exclusion. On the other hand, some policies not only insure against loss caused by "collapse," but also define that term, at least to a certain extent, by containing specific exclusions from coverage under the clause.
The second consideration affecting the question of whether damage comes within the coverage of the clause is the view adopted by the court in a given case as to how the term "collapse," as used in the policy, is to be defined. Courts have taken two different positions as to the general meaning of this term.
One view taken by courts is that "collapse" is an unambiguous term which denotes a falling in, loss of shape, or reduction to flattened form or rubble.
In contrast, other courts say that there can be a "collapse" even though there has been no falling, tumbling down, or near total destruction. Under this view, one court held that, if brought about by unusual or extraordinary circumstances which the parties could not normally expect or foresee at the time they entered into the contract, the settling, cracking, bulging, or breaking of the insured building in such a manner as to materially impair its basic structure or substantial integrity constitutes a "collapse" within the meaning of the policy.
Should I Consult a Real Estate Lawyer?
Homeowner's insurance and other property insurance policies can be very complex and confusing. Additionally, each state has different laws regulating homeowner's insurance. Having an attorney look over your policy can help determine if the insurance company is improperly denying you coverage. If you ever have to go to court, a real estate lawyer experienced in insurance law will know how to deal with these types of lawsuits and navigate you through the complicated legal process.