A denied roof collapse claim in New Jersey puts a persistent industry question to the test: can wear-and-tear exclusions override a policy's own collapse coverage?
Market Street Properties, LLC sued Farmers Mutual Fire Insurance Company of Salem County in the US District Court for the District of New Jersey on February 27, 2026, alleging the insurer wrongfully denied coverage for a roof collapse at a commercial building in Camden. The case, No. 1:26-cv-02081, centers on a tension familiar to property claims professionals - what happens when a general exclusion and a specific coverage grant collide.
According to the court filing, the rear portion of the building's roof collapsed on July 14, 2025. An engineer retained by the property owner determined the collapse resulted from hidden decay of an interior timber frame truss that lost bearing at a masonry pier, causing the roof rafters on each side of the truss to collapse into the building. The property owner spent approximately $250,000 on temporary and permanent repairs.
Farmers Mutual denied the claim in August 2025, attributing the loss to wear and tear. Its investigation found that brick walls and truss support columns had deteriorated from moisture intrusion and that the roof carried at least five layers of roofing material where a maximum of two should have existed.
Here is where it gets interesting for insurers. The policy included Supplemental Coverage for Collapse, extending coverage for collapse caused by "hidden decay, unless such decay is known to an insured prior to collapse" and "use of defective material or methods in construction, remodeling, renovation or repair." The property owner argues that both causes the insurer cited - deterioration and excessive roofing layers - fall squarely within those covered triggers.
The filing cites Romano v. Metropolitan Prop. & Cas. Ins. Co. (2014), where a New Jersey court observed that collapse coverage for hidden decay "would be illusory if the deterioration exclusion applied, since decay is synonymous with deterioration." If that reasoning holds here, carriers relying on similar policy structures to deny collapse claims could face real pushback.
There is another wrinkle worth watching. The filing alleges that Farmers Mutual inspected the property twice before the collapse - once before the policy's inception in September 2024 and again for an unrelated claim in or around March 2025 - and that, upon information and belief, neither inspection flagged deterioration or structural concerns. For claims professionals, the takeaway is straightforward: pre-loss inspection records can become evidence when coverage is later disputed.
The property owner also points to the exclusion's own preamble, which states that losses are excluded "except to the extent otherwise specifically provided for in this policy." In an unpublished decision, a New Jersey appellate court endorsed that reading in Parko Properties, LLC v. Mercer Ins. Co. of New Jersey (2020), holding that general exclusions do not override collapse coverage the policy specifically provides.
No final determination has been made. A jury trial has been demanded.
