Coverage Denied under “Intentional Acts” and “Concealment of Fraud” Policy Provisions
In Aurelius v. State Farm, a wife made a claim under a homeowner’s insurance policy after her husband’s arson caused substantial damage to their home. Both husband and wife were named as policyholders. The husband denied causing the fire in his recorded statement. The insurer, State Farm, denied coverage under both the “Intentional Acts” and “Concealment of Fraud” policy provisions.
The applicable provisions stated that “if you or any person insured” intentionally causes a loss for the purpose of obtaining insurance benefits, then the policy is void and there is no coverage for “you or any other insured.” The policy also stated it was void “as to you and any other insured, if you or any other insured under this policy has intentionally concealed or misrepresented any material fact…”
The wife argued that she had no knowledge or participation in the insurance fraud. She disputed whether the language of the insurance policy clearly stated that coverage would be excluded as to an innocent insured in the event of some improper behavior by any insured.
The court in Aurelius v. State Farm held that coverage was properly denied based on the “Intentional Acts” provision because it was undisputed that an insured, the husband, intentionally started the fire that was the basis for the claim. The court also held it was proper to deny coverage based on the “Concealment or Fraud” provision because it was undisputed that the insured husband made a recorded statement in which he denied starting the fire.
Aurelius v. State Farm Fire and Casualty Co., 384 Ill.App.3d 969, 894 N.E.2d 765, 323 Ill.Dec. 739 (Ill.App. 2 Dist., 2008).
