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



AAIS policy language in its standard homeowners policy is similar to the ISO wording.


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 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. However, it is doubtful under the liberal view that coverage would be triggered unless there is a clear or imminent danger of collapse. 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...