Washington Court Finds Coverage For "Collapse" Is Not Set In Stone

As this blog has documented, the language of insurance policies evolves; it changes to address new risks, and it also responds to new interpretations of old policy provisions. Even if a policyholder maintains a long-standing relationship with a single carrier, the availability of coverage might turn on whether the loss occurred in a particular policy term. Property coverage for "collapse" provides an example of this development. After a number of courts found that the word could be applied to the slow deterioration of structural elements, insurers began to include a narrower definition in the text of their policies. But last month, in American Economy Ins. Co. v. CHL, LLC, No. C15-899 (W.D. Wash. July 7, 2016), a federal court had to decide what the relevant term meant before any policy had defined it. As it turned out, the court held that the undefined term was still too narrow to provide coverage in that case.