Chip Merlin | Property Insurance Coverage Law Blog | July 26, 2019
As a younger member of the Merlin Law Group team, my generation is more likely to appreciate the lyrical ingenuity of the Eminem song, ’Till I Collapse. Homeowners of all generations, however, should appreciate how collapse coverage is defined in Florida.
Your homeowner’s insurance policy may include an additional coverage for “collapse.” Collapse may be covered for a variety of causes depending on the policy, such as hidden decay, insect/vermin damage, weight of rain, weight of contents, defective material/construction and others. But what does “collapse” even mean? Does my house need to be reduced to an unrecognizable pile of rubble to allow insurance coverage?
Defining “collapse” and whether your home insurance policy will cover a loss is something that the courts, policyholders, and insurance companies often grapple with. For an excellent background on collapse coverage, see previous MLG blog post, Court Defines “Collapse” by Shane Smith, or for how collapse coverage is applied under California law, see, What Constitutes an “Abrupt Collapse”? by Edward Eshoo.
In Florida, collapse coverage has evolved due to changes in policy language and judicial interpretation. If no definition is provided in the policy language, courts since 1978 have defined “collapse” quite liberally as “a material and substantial impairment of the basic structure of a building or part of a building.”1 However, since contract law allows parties to determine their own definitions, insurance companies soon began to write more precise definitions into the policy language to constrict their collapse coverage.
For example, one policy I recently read covers only losses of an “abrupt collapse,” defined more specifically as “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.”2However, a policy like this one still leaves words such as “abrupt,” “cave-in,”3 and “fall down”4open to interpretation.
Luckily, an ambiguous provision is construed in favor of the insured and strictly against the drafter. In Kings Ridge Community Association, Inc. v. Sagamore Insurance Company,5 the court picked up a Merriam–Webster’s dictionary to settle the ambiguity. Here “abrupt” was defined as an “action or change without preparation or warning: unexpected.” Thus, the court held a clubhouse roof that suddenly buckled when the trusses failed, leaving it sagging inward about 12-inches, may constitute an “abrupt collapse” under the policy.6
Last year, the Southern District of Florida decided another “abrupt collapse” case under Florida law.7 Despite a similar structural “sagging” as the caved-in roof in Kings Ridge, this collapse seemed to be less “abrupt.” Often a factor is whether the owner knew or should have known the damage was threatening the structural integrity of the property prior to the collapse. The property owner here likely knew the building was steadily collapsing over time, since the structural defects had existed for years and the building admittedly had “gradually deteriorated.” In fact, the property owner submitted several conflicting dates as to when the building actually “collapsed.” The case therefore did not make it to the jury to determine the factual issues. However, this case is currently on appeal to the U.S. Court of Appeals for the Eleventh Circuit.
In the words of rap artist Eminem, no collapse occurs “’till the roof comes off, ’till the lights go out.” Insurance companies and Florida courts have clearly taken a different approach to define collapse and determine whether a loss is covered under your homeowner’s policy.
(Note: This guest blog is by Sean Cornell, a law student clerking in our Tampa, Florida, office)
1 Auto Owners Ins. Co. v. Allen, 362 So.2d 176 (Fla. 2d DCA 1978).
2 For a different policy language example, see Sandalwood Condominium Ass’n at Wildwood, Inc. v. Allstate Ins. Co., 294 F.Supp.2d 1315, 1319 (M.D.Fla.2003) (involving a policy that mandates a collapse be “direct, sudden and accidental physical damage”).
3 Kings Ridge Cmty. Ass’n, Inc. v. Sagamore Ins. Co., 98 So.3d 74, 78 (Fla. 5th DCA 2012)(defining “Cave-in” as “to fall down or inward…”).
4 Kings Ridge, 294 F.Supp.2d at 78 (defining “Fall” as “to descend freely by the force of gravity … to hang freely … to drop oneself to a lower position … to become lower in degree or level.”).
7 S.O. Beach Corp., et al. v. Great American Ins. Co., 305 F.Supp.3d 1359 (S.D.Fla.2018).