Over time, rain leaked through cracks in the mortar in a masonry wall (undetected) until rotting floor joists and sagging floor revealed the loss. The wear and tear clause included in the maintenance type losses exclusion includes "hidden decay." However, collapse coverage includes "hidden decay." Which wins?
Tennessee Subscriber
You raise a very interesting question in the matter of a seeming conflict between the "maintenance type loss" exclusion in the Businessowners special form and the coverage agreement respecting collapse in the same form. The one says that there is no coverage for loss "caused by or resulting from decay" and the other says "we will pay for loss or damage caused by or resulting from collapse of a building or any part of a building caused by hidden decay."
Actually, we believe the resolution is fairly simple. The coverage agreement for collapse contrasted with the decay exclusion creates an ambiguity of the first order. Ambiguities are always resolved in favor of the insured and collapse damage that is caused by decay is covered.