8 ADJUSTINGTODAY. COM A D J U S T I N G T O D A Y (1) Collapse means an abrupt falling down or caving in of a building or any part of a building with the result that the building or part of the building cannot be occupied for its current intended purpose. (2) A building or any part of a building that is in danger of falling down or caving in is not considered to be in a state of collapse. (3) A part of a building that is standing is not considered to be in a state of collapse even if it has separated from another part of the building. (4) A building or any part of a building that is standing is not considered to be in a state of collapse even if it shows evidence of cracking, traditional view requires that there be a sudden falling-in, or caving in, into a flattened form of rubble of a building before coverage will apply. In short, an actual collapse must take place. Other courts have favored the broad or liberal view of collapse — requiring only a structural impairment of the building without the necessity of an actual collapse.7 However, it is doubtful under the liberal view that coverage would be triggered unless there is a clear or imminent danger of collapse.8 As noted earlier, ISO and AAIS added definitions of “collapse” to limit its scope to the traditional or conservative view. Admittedly, it appears that insurers have fortified their position with this new wording in standard property insurance forms to exclude coverage for loss by collapse unless there has been an bulging, sagging, bending, leaning, settling, shrinkage or expansion.6 AAIS policy language in its standard homeowners policy is similar to the ISO wording. Conclusion The latest standard property insurance forms of ISO and AAIS specifically exclude loss by collapse, except as provided under the incidental or additional coverage for collapse. Thus, loss by collapse is excluded, but then given back as an incidental or additional coverage, provided the loss is caused by one of the specific perils identified earlier in this article (e.g., hidden insect or vermin damage, hidden decay, etc.). As noted earlier, two opposing viewpoints emerged that defined the meaning of collapse. The ____________________ 6Copyright, Insurance Services Office, Inc., 1999, with permission. 7In the following states, court decisions have held for the traditional view: ME, MI, MA, MO, IN. Decisions in the following states favored the liberal view: UT, RI, MD, FL, NC, NY, CT, GA, CO, NM. A South Carolina court has taken a middle ground position concerning collapse which requires that a structure must not only suffer substantial impairment of its structural integrity, but must also be in danger of “imminent” collapse to trigger coverage. This information should not be viewed as a complete list, but rather as a starting point for further inquiry. Insurer Prevails on the Meaning of “Collapse,” by Antoinette L. Banks, Esquire, NY law firm of Mound Cotton Wollan & Greengrass, that appeared in riskVue, 2004, published by Warren, McVeigh & Griffin, Inc., Risk Management Consultants, Newport Beach, CA. 8Alan Miller, Esquire, What Constitutes a Collapse Under a Property Insurance Policy? reprinted from “The Brief,” Vol. 29, NO.2 (Winter 2000), a publication of the American Bar Association.
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