Warning, this scenario mentions suicide. The insured's 21-year-old son lives with them and suffers from depression. While the insured parents are away, their son goes through a breakup and decides to kill himself. He gets very drunk and douses the entire first floor in the gasoline they use for their lawnmower. He turns over a candle and goes upstairs to pass out. A neighbor called the police in time, and the young man was saved-- but the resulting fire consumed the house.
Notable Timestamps
[ 00:10 ] - John shares a serious scenario that raises pertinent coverage questions.
[ 01:22 ] - The intentional loss exclusion ensures insurance covers fortuitous/accidental events, not property purposely destroyed for the prupose of collecting insurance proceeds.
[ 02:00 ] - The intentional loss exclusion is clearly worded: if any insured commits an intentional act causing loss, no insured, even innocent ones, are entitled to coverage.
[ 03:16 ] - Two criteria for the exclusion: the act must be by an insured, and committed with intent to cause loss, which can be difficult to prove.
[ 04:53 ] - Courts consider if the perpetrator lacked the ability to form intent due to mental handicaps, mental health issues, or age, making the exclusion potentially inapplicable.
[ 05:40 ] - Courts are now less friendly to the intoxication defense. The inferred intent doctrine holds that if a loss (like fire from gasoline) is "substantially certain to occur," intent is inferred, regardless of primary motive (e.g., suicide).
[ 08:30 ] - Suicidal intent can be a defense, as individuals may not be in their right mind. However, the inferred intent doctrine makes recovery difficult if the actions were likely to cause property damage.
[ 13:36 ] - In states with a Standard Fire Policy (SFP), which uses "conduct of the insured," innocent co-insureds might still recover, overriding tighter policy language.
[ 17:20 ] - John provides a recap of the points above.
Your PLRB Resources
Annotation: Intentional Loss (HO90)
https://www.plrb.org/documents/intentional-loss-ho90/#toc22
50-State Survey: Innocent Co-Insureds
https://www.plrb.org/documents/table-of-contents-innocent-coinsured/
SEE ALSO: 988 Suicide & Crisis Lifeline - 988 offers 24/7 judgment-free support for mental health, substance use, and more. Text, call, or chat 988. samhsa.gov/mental-health/988
Employees of member companies also have access to a searchable legal database, hundreds of hours of video trainings, building code materials, weather data, and even the ability to have your coverage questions answered by our team of attorneys (https://www.plrb.org/ask-plrb/) at no additional charge to you or your company.
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Legal Information
The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidance from their companies and counsel as appropriate.
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