The insureds extensively remodeled their home and installed decks from 1995 to 1996. See Sprague v. Safeco Ins. Co. of Am., 2010 Wash. App. Ct. LEXIS 2419 (Wash. Ct. App., Nov. 1, 2001). The decks were supported by "fin walls." In May 2008, the insureds discovered decay in the fin walls and filed a claim with their insurer, Safeco.
Safeco hired an independent expert to investigate the claim. The investigation revealed that the decayed wood posts in each of the six piers supporting the deck resulted in a substantial impairment of structural integrity and were in a state of imminent collapse. The expert determined that these conditions occurred prior to 2003, when Safeco first started limiting its collapse coverage.
The policy specifically excluded damage as a result of construction defects and rot. But the policy further provided, "any ensuing loss not excluded is covered." Safeco denied coverage because the cause of the loss was defective workmanship and rot. The insured argued that collapse was an ensuing loss and thus covered. The trial court granted summary judgment to Safeco.
On appeal, the insured maintained that since collapse was not specifically excluded in the polices between 1999 and 2003, it was a covered loss under the ensuing loss language in the policy. The court agreed. The losses that were faulty construction and rot were not covered, but the "ensuing losses," those that resulted from such faulty construction or rot, were covered because such an ensuing loss was not excluded elsewhere in the policy. Since Safeco's own experts agreed that the damage to the fin walls placed the decks in a state of imminent collapse, there was no factual dispute. Although Safeco's post 2003 policies defined collapse to mean actually falling down, this was immaterial. Because the parties agreed that damage occurred prior to 2003, the subsequent definition of collapse did not apply.
