FACTS

Co-owners of a home insured it.  One of them burned it on purpose. The other one, innocent of involvement in the fire, made a fire loss claim on the homeowner’s insurance. The 2020 Mass Supreme Judicial Court case Aquino v United Property & Casualty Company (2019) stated “Pastrana set fire to the home intentionally without any involvement of the part of the plaintiff.”

ISSUE

Can an innocent co-insured collect on a standard fire insurance policy if the other co-insured intentionally sets fire to the property?

HOLDING

Coverage is excluded for acts of “the insured” not for those of “an insured”.  Plaintiff can recover (her share) despite the co-insured’s intentional acts.

REASONS

Law requires co insureds, on a standard policy to have not joint liability but instead to have several liability. The obligations of each are separate. 

Massachusetts law mandates fire insurance coverage terms. (First enacted just after the “great Boston fire of 1872”) Under the standard form, insurers can deny coverage for losses arising out of acts by “the” insured.  The go-to treatise for insurance law, is Couch on Insurance, who opines that innocent co-insureds should still collect.  The exclusion for acts of “the insured” must be applied individually to each insured.  The responsibility is several or separate, not joint.

ISSUE

If recovery is not completely excluded, how much does the innocent spouse recover?

HOLDING

An amount equal to their pro rata % interest – here, half.   The guilty co-insured forfeits its rights but that does not enhance the innocent plaintiff’s insured interest.

COMMENT – don’t buy a house with an arsonist