Earlier this week, the Washington Court of Appeals affirmed the bedrock principle in insurance-coverage cases that insurers will always lose when a genuine ambiguity controls whether an insurer will have to pay a claim. The ambiguity in this case arose both from lexicographers’ habit of capturing nuances in writing dictionary definitions of “decay,” and the insurer’s own choice to use different words for supposedly the same meaning.
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Today, the Washington Supreme Court provided much needed relief for policyholders faced with buildings that are structurally impaired, but have not yet actually fallen down. In Queen Anne Park Homeowners Ass’n v. State Farm Fire & Cas. Co., the Court resolved a long dispute in Washington (and in other states) concerning the appropriate definition of “collapse” in a property-insurance policy, holding that “collapse” means “substantial impairment of structural integrity of a building or part of a building.”

For a long time, insurers have argued that “collapse” (when undefined) means that a building or part of a building must actually have fallen down. The Washington Supreme Court flatly rejected that construction.
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