Each homeowner’s insurance policy differs, depending on the amount of coverage and the insurance company. In the typical homeowner’s insurance policy, fires caused by accidents or basic negligence are covered. Intentional fires are not. It’s a no brainer that homeowners purchase insurance to cover the accidents in their home. However, in some policies, negligence isn’t always covered. In those instances, insurers offer a high premium for negligence coverage.
California law mandates the minimum content of a fire insurance policy. Under California Insurance Code § 2071, insurers are free to provide more generous coverage, but they cannot provide coverage that is not at least substantially equivalent to the statutory policy. The California statutory fire policy does not contain an intentional acts exclusion. Rather, intentional acts are excluded by operation of California Insurance Code § 533, which is an implied exclusion in all California insurance policies. That statute provides: "An insurer is not liable for a loss caused by the willful act of the insured; but he is not exonerated by the negligence of the insured, or of the insured’s agents or others."
In November 2010, reality TV star Kat Von D (Katherine von Drachenberg), of the television show "LA Ink," suffered a huge loss when her leased Los Angeles Hollywood Hills home burned down, leaving the home essentially at a total loss. Her insurer, State Farm, paid $909,199, which apparently included coverage for both the personal and real property. Kat Von D was reported to have been on her book tour at the time of the fire.
On May 29, 2012, State Farm filed suit against Kat Von D, seeking the recovery of the $909,199. State Farm believes Kat Von D was home at the time of the fire and lit the candles that caused the fire.
State Farm contends that, "Defendants (Ms. Von D) had a legal and contractual duty to not engage in any activity which would cause damage or peril to the premises or its contents," and further stated that she, "failed to use reasonable and ordinary care in the use of burning candles within the premises." State Farm contends that Ms. Von D, who was leasing the home, violated the insurance policy contract by failing to use due care and using the home for commercial purposes, even though the policy states that the coverage was for a personal residence. Under California law, if the insured violates the policy, the insurer may, in some instances, deny coverage.
As this case unfolds, the interpretation of California Insurance Code § 533 and an insured’s possible negligent act and alleged violations will bring a new twist on whether an insurer can pursue the insured after it pays a loss.
