Allstate beats appeal in three coverage fights regarding “collapse” coverage
Submitted by Jessica Gregory on 04 Apr, 2019
The United States District Court of Appeals for the Second Circuit recently announced its decision, affirming the denial of coverage to three (3) homeowner’s under the “collapse” provision of their homeowner’s insurance policies with Allstate for claims of cracking in the homes’ basement walls due to defective concrete.
The faulty concrete caused the foundation of these homes to crack, leaving them in a state of slow-motion collapse. The faulty concrete was used to pour the foundation of nearly 35,000 homes throughout northeastern Connecticut, resulting in dozens of lawsuits. The three homeowners involved in these suits with Allstate are just a few of the dozens of homeowners battling with their insurer’s over whether these “cracking” damages to their home are covered under their homeowner’s policy’s “collapse” coverage.
In its Opinion, the Second District noted that the Allstate policies at issue specifically define “collapse” to state that the “collapse, must be “entire”, as well as “sudden and accidental.” Additionally, the policy states that “collapse does not include settling, cracking, shrinking, bulging, or expansion.” It was undisputed that, despite the fact that the walls were cracking, they remained standing. Thus, the damages to the homes 1) did not involve the “entire” collapse of the homes, 2) the damages were gradual, not sudden, as required under the definition of “collapse”. Additionally, the court noted that the definition of “collapse” specifically excluded cracking.
The Second District’s opinion states that under Connecticut law, if a policy’s terms are “clear and unambiguous”, that language, “must be accorded its natural and ordinary meaning.” Therefore, applying the plain and ordinary language of the Allstate policy, the court held that there was no coverage for this loss.
Florida law also holds that if the language of a policy is clear and unambiguous, courts are required to apply the plain and ordinary meaning of the policy’s terms. Thus, Florida courts would hopefully reach the same conclusion when interpreting similar policy language.
The three Allstate cases filed in the U.S. Court of Appeals for the Second Circuit are:
– William A. Valls, et al. v. Allstate Insurance Co., 17-3495;
– Nancy E. Carlson et al. v. Allstate Insurance Co., 17-3501;
– Alan D. Lees et al. v. Allstate Insurance Company 18-007.