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Indiana Court Denies Coverage for Husband, After Wife Intentionally Burns Down Their Home

Blogs, Insurance Coverage

In a recent decision, the Indiana Court of Appeals held that an innocent co-insured spouse could not recover damages under his homeowners’ insurance policy after his wife intentionally set fire to their home. Deeter v. Indiana Farmers Mutual Insurance Co., No. 43A04-1305-PL-229 (December 4, 2013). 

Rick Deeter (“Plaintiff”) and his wife purchased a Homeowner’s Insurance Policy (“Policy”) from Indiana Farmers Mutual Insurance Company (“Farmers”). The Policy listed both Plaintiff and his wife as the “insured” on the Policy’s declaration page. The Policy contained an Intentional Acts exclusion that provided Farmers will not pay for a “loss which results from an act committed by or at the direction of an “insured” and with the intent to cause a loss.”

On March 3, 2011, while Plaintiff was at work, his wife, upon hearing the Plaintiff was having an affair, became irate and purposefully set fire to the couple’s home. Plaintiff filed a claim for insurance proceeds. Farmers refused to pay on the insurance policy, stating that because the wife had intentionally burned down the home, the situation fell within the Intentional Acts exclusion of the Policy. Both parties moved for summary judgment, and the trial court granted Farmer’s motion. 

On appeal, Plaintiff asserted two arguments. First, that the insurance Policy’sIntentional Acts exclusion was ambiguous, in that a reasonable person might interpret the clause to mean that Farmers will not cover a loss that results from an intentional act that is intended to cause a loss that will result in property damage or the intent to cause a loss to recover from the insurance policy. The Court rejected the argument, determining that the Policy’s exclusion for an intentional loss was clear and unambiguous and that Plaintiff’s wife intentionally set fire to the home. 

Second, Plaintiff argued that he was an “innocent co-insured spouse” who should not be barred from recovery. The Court rejected Plaintiff’s argument, finding that Farmer’s included an explicit exclusion in its Policy for a loss that resulted from an intentional act by a co-insured. The Court held, in this case, it was clear that the Plaintiff and his wife were both listed as an “insured” on the Policy, and that the policy explicitly stated that it would not cover a loss that resulted from an intentional act of “an insured.” Thus, Farmers was within the scope of its contractual rights to deny the Plaintiff’s insurance claim in accordance with the intentional acts exclusion contained in the Policy.

For a complete copy of the Opinion click here