The roof of our insured's mobile home recently collapsed during a heavy rainstorm when rain collected on the roof. The adjuster discovered that a latent defect in the roof trusses had caused them to expand and contract over the years and they became bowed, creating a “bowl.” The insurer denied the loss under the open perils policy, based on the exclusion of latent defect.
Do you believe this exclusion is applicable?
Michigan Subscriber
The collapse of the mobile home's roof was caused by a covered peril, i.e., weight of rain on the roof. The exclusion of “latent defect” does not apply.
The latent defect exclusion is intended to eliminate payment by the insurer for correcting defective methods of construction. If prior to the loss the insured had discovered that the roof trusses were bad, he would not have been able to look to the insurance company for payment to replace them. He still cannot expect to be paid for the replacement of the trusses, but water damage from the collapsed roof and other collapse expenses are covered.
Consider a loss involving a latent defect in a furnace. If the furnace malfunctions due to the latent defect and the house burns down, no insurer would deny the fire claim.
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