In Jowite Limited Partnership v. Federal Insurance Company, the United States District Court for the District of Maryland issued a rare opinion addressing whether “collapse” is a covered “ensuing loss” under an all-risks insurance policy without a specific collapse coverage. Case No. 1:18-cv-02413-DLB (D. Md. August 17, 2020). In a win for insurers, the Court held that, under Maryland law, the ensuing loss exception to a construction defect exclusion did not apply to reinstate coverage where the purported “collapse” was to the defective property itself, regardless of whether the “collapse” was characterized as merely the damage caused by construction defects or a separate and distinct peril. The insured, Jowite Limited Partnership (“Jowite”), owned an apartment complex constructed in…
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Ensuing Loss Clause Does Not Create Coverage for “Collapse” Inseparable from Damage Caused by Excluded Perils
Posted in Causes of Loss, Collapse, Coverage, Mold, Water
Collapse Coverage: Second Circuit Holds That Cracking Walls Do Not Constitute “Collapse”
Most homeowners’ policies – and property insurance policies in general – contain a limited coverage extension for “collapse.” The interpretation of that collapse coverage has been litigated around the country for decades, with different jurisdictions reaching considerably different results. The latest of these decisions, Valls v. Allstate Insurance Company, No. 17-3495-cv (2d Cir. 2019), comes out of the Second Circuit, deciding the case under Connecticut law. The case presented a single substantive question: does the “collapse” provision afford coverage for basement walls which had significant cracking but remain standing? Both the district court (D. Conn.) and the Second Circuit Court of Appeal concluded that it does not. In Valls, the plaintiffs owned a home in Connecticut which was insured by…
