Insurance Coverage For Collapse: How Has It Changed and Why?


Adjusters International Disaster Recovery Consulting

Insurance Coverage For Collapse – How Has It Changed and Why?

By Robert J. Prahl, CPCU

Occasionally, losses occur for which insurance coverage was not contemplated by insurers, yet it is not clear from policy language that the loss is excluded. In such cases, the organizations that draft insurance language usually act swiftly to remedy the situation by introducing exclusions or limitations that will preclude or limit coverage to what was originally intended. A good example is collapse coverage. This is not to say that collapse is not a covered peril under standard property insurance policies, but rather that court decisions have expanded the scope of the coverage well beyond what insurers originally intended.


“To fall or cave in; crumble suddenly.”

Webster’s lead definition of “collapse” seems so clear and straightforward as to preclude the possibility of such an event being debatable. Yet in the field of property insurance, few concepts have been as open to interpretation.

Insureds, insurers, insurance policy drafting organizations and the courts have all weighed in, with the results ranging from the emergence of both conservative and liberal views of the coverage, to the development of new policy forms to address it.

In this issue of Adjusting Today, expert Robert Prahl takes a close look at insurance coverage for collapse, including how it has evolved, how it has been interpreted by insurers and the courts, and some of the latest forms developed by the insurance industry to further define it.

In an appropriate adjoining article, Mr. Prahl offers insight into the subject of policy language ambiguity, including who wins in such situations and why the adjuster’s role in interpreting complex policy language is especially important.

From cover to cover, it’s interesting and informative reading for today’s property insurance professional!

— Sheila E. Salvatore, Editor