Interpretation of the meaning of the term “collapse,” both in the context of a covered peril and as an exclusion, is an often litigated issue where the property has not actually fallen to the ground.
In Kings Ridge Community Association, Inc. v. Sagamore Insurance Company, 2012 Fla. App. LEXIS 10882 (Fla. 5th DCA, July 6, 2012) the Court of Appeal of Florida, Fifth District found the definition of “collapse” in the policy at issue to be ambiguous, and reversed the trial court’s holding that the insured building was not in a state of “collapse.”
The parties agreed on the nature of the claimed loss, which the Court of Appeal described as follows:
On the morning of February 24, 2010, the exterior doors of the west wing of the clubhouse began to shake and the drop ceiling and soffits deflected downward. The flat roof above the deflected ceiling revealed a substantial depression adjacent to the westernmost HVAC unit. The drop ceiling in the northwest corner of the west wing of the clubhouse structure was significantly deflected downward. The first eleven roof trusses adjacent to the west face mansard roof section had deflected approximately twelve inches at midspan.
Id. at *1-2 (footnote omitted). The trial court held that this damage did not constitute a state of “collapse” under the policy, and granted summary judgment in favor of the insurer, Sagamore Insurance Company (“Sagamore”).
The Sagamore business owner’s policy at issue stated that a “covered cause of loss” includes:
(1) With respect to buildings:
(a) 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 intended purpose;
(b) 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;
(c) 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;
(d) A building that is standing 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, bulging, sagging, bending, leaning, settling, shrinkage or expansion.
Id. at *2-3. Sagamore argued that the loss was not covered under its policy because the insured building was still standing and its roof had not “fallen.” Id. at *7. The Court of Appeal disagreed. It found that as the ceiling had deflected downward twelve inches, the definitions of both “falling down” and “caving in” were met. Id. at *8. It stated that “[t]he policy is not written in terms of how far a part of a building must fall down or to what degree a part of a building must cave in to constitute ‘collapse.’” Id. The Court of Appeal further stated that: “The policy does not clearly require total destruction for a ‘collapse’ to occur. To the extent that the policy can be interpreted as requiring the roof to have fallen to the ground for coverage to apply, the policy is ambiguous.” Id. at *9.
We continue to monitor the law on interpretation of the term “collapse” as it continues to evolve. As set forth in this case, interpretation of the term is ultimately dependent on the particular language used in the policy and precedent in the jurisdiction, as applied to the facts of a particular loss.