My client is insured under the HO-3 program. Recently, his ceiling collapsed. The drywall was installed about 20 years ago using a product designed for this purpose. The company denied coverage, citing the latent defect exclusion. We think coverage is found under collapse. Can you help?

Michigan Subscriber

It is our opinion that the loss described is covered. Your HO-3 insured suffered a loss in which his ceiling collapsed. The drywall was held up by tape intended for this purpose.

You state the insurer has denied the claim, citing the exclusion of latent defect. The policy's function is to serve as a source of protection against accidental loss, and the list of exclusions beginning with "wear and tear" reinforces this. The insurance is not intended to cover the marring, for example, that wood furniture is subject to over time.

However, collapse is covered under Additional Coverages. The policy states, "We insure for direct physical loss to covered property involving collapse of a building or any part of a building caused only by one or more of the following…" Hidden decay is listed as a cause.

The ceiling is a part of the building. "Decay" is defined in Webster's Collegiate Dictionary (10th ed.) as "gradual decline in strength, soundness, or prosperity or in degree of excellence or perfection." The tape gradually declined in strength, or decayed, and the ceiling fell.

Black's Law Dictionary (fifth ed.) defines a latent defect as "a hidden or concealed defect." Since the tape served its purpose in holding the ceiling up, it was not defective. It simply decayed.

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