(Article from Insurance Law Alert, May 2018)
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Noting the wide-ranging coverage implications for homeowners whose homes were constructed with defective concrete, a Connecticut federal district court certified to the Connecticut Supreme Court a question regarding interpretation of “collapse” as used in a homeowner’s policy. Karas v. Liberty Ins. Corp., 2018 WL 2002480 (D. Conn. Apr. 30, 2018).
The plaintiff homeowners, like thousands of others in Connecticut, discovered cracks and deterioration of the concrete walls in the basement of their residence. Their homeowner’s insurer denied their claim on the basis that it was caused by deterioration, which was not covered under the policy. The homeowners sued, arguing that the loss was a covered “collapse” under the policy.
The court noted that under Connecticut precedent, where, as here, collapse is undefined in an insurance policy, it is sufficiently ambiguous so as to include coverage for “any substantial impairment of the structural integrity of a building.” The court concluded that the question of whether the concrete-related damage constitutes a collapse under this standard warrants certification because it is determinative of pending litigation within the state and not addressed by controlling appellate precedent. Thus, the court asked the state supreme court to decide “what constitutes ‘substantial impairment of structural integrity’ for purposes of applying the ‘collapse’ provision of this homeowners’ insurance policy?” We will keep you posted on any developments in this matter.