Discussion of a Collapse Claim

 

April 4, 2016

In this action, the insureds challenge the insurer's failure to provide coverage for the damage to basement walls of their home. This case is Roberge v. Amica Mutual Insurance Company, 2015 WL 9480008.

 

The insureds asserted that the basement walls of their home have collapsed due to the pattern cracking caused by a chemical compound found in the basement walls. The insurer stated its policy did not insure for a loss involving collapse except when there is an abrupt falling down or caving in of a building with the result that the building cannot be occupied.

 

The United States District Court, Connecticut, noted the argument of the insurer that the basement walls are part of the foundation and thus excepted from coverage under the policy terms. The court said that it has held as ambiguous language in other policies excluding loss to a foundation. The court said that the term “foundation” could be reasonably construed to refer to the footings of a structure or the lowest load-bearing part of the building rather than a stone or concrete structure that supports a building, which definition could encompass basement walls. The court ruled that although the insurer may have a strong argument in its favor, the court must construe the allegations of the complaint most favorably to the insureds. The court found that the policy language pertaining to collapse and foundation was ambiguous and the insured's complaint plausibly alleges that the policy does not exclude from collapse coverage loss to basement walls.

 

The insurer also argued that the insureds failed to allege facts to support a plausible claim that the home cannot be occupied for its intended purpose or that an abrupt falling down or caving in occurred during a period when the policy was in effect. The insured answered that the insurer issues its policies in one year increments and that loss coverage is premised upon the terms of the policy that was in effect at the time that the loss occurred. The court noted that the insureds purchased the home in 1993, at which time they commenced the home insurance coverage with Amica. The insureds further allege that at some point between the date on which the basement walls were poured and the spring of 2015, the basement walls suffered a substantial impairment to their structural integrity. The court again decided that, construing all allegations most favorably to the insureds, the insureds did state a plausible claim for coverage.

 

The court denied the insurer's motion to dismiss.

 

Editor's Note: The U.S. District Court, Connecticut, analyzed the Amica policy pertaining to collapse coverage and ruled that the policy language was ambiguous and so, the motion to dismiss the complaint was denied.