The additional property insurance coverage of collapse caused by hidden decay is one which was seldom encountered until the public adjusters at Tutwiler & Associates pioneered its application to a wide range of hidden damage situations for condominiums, apartments, residential and commercial buildings. Our firm has experienced tremendous success over the years providing insurance carriers with data that compelled them to cover these Collapse losses, some of which were in the eight figure range. In South Florida for example, where demolition was used to clear land for new developments, we have helped homeowners and businesses settle claims for damage caused to their properties by the vibrations of the blasts.
As a result of these and other successes, insurance companies began restricting the coverage for hidden collapse in very creative ways. The most important method used by carriers to limit their exposure under additional coverage for collapse was to define collapse in a very specific and limited way. Here is an example of typical language in an actual insurance policy which illustrates this change:
The original language of the insurance policy under the section entitled OTHER COVERAGES states the following:
10. COLLAPSE - We insure for risk of direct physical loss to covered property involving collapse of a building or any part of a building caused only by one or more of the following:
a. Perils Insured Against in this policy;
b. hidden decay;
c. hidden insect or vermin damage;
d. weight of contents, equipment, animals or people;
e. weight of rain which collects on a roof;
use of defective materials or methods in construction, remodeling or renovation if the collapse occurs during the course of the construction, remodeling or renovation....
Now the modified policy language.
Under the endorsement entitled SPECIAL PROVISIONS-FLORIDA, and the OTHER COVERAGES it states:
10. In Forms DP 00 02 and DP 00 03, Collapse is deleted and replaced by the following:
a. With respect to this OTHER COVERAGE:
(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 intended purpose.
(2) A building or any part of a building that is not 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 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....
As one can see, the building must essentially be in a heap of rubble for it to qualify under the interpretation of the policy definition. If you believe you have a Collapse situation, please feel free to call the public adjusters at Tutwiler & Associates for a no obligation assessment of your property claim situation.