Landlord and Tenant Relationship with a Fire Insurance Policy
A home owner had a homeowner’s policy on a home he was renting out to the defendant Callaghan. The house was damaged by a fire. The insurance company paid the owner the damages caused by the fire and brought suit against the renter for subrogation. The defendant filed a motion to dismiss, which was granted. Plaintiff appealed, arguing that the lease clearly indicated that the parties intended the defendant to be liable for fire damage and that defendant was not entitled to the status of co-insured on the landlord’s fire insurance policy.
Courts have routinely held that a tenant is not liable for fire damage to the leased premises, unless the terms of the lease, construed as a whole, clearly indicate that the parties intended for the tenant to be liable for such damage. Additionally, they have held that the payment of rent grants the tenant the status of co-insured, as to a fire insurance policy.
The court held that it was clear that defendant was not liable for the fire damage to plaintiff. The court reasoned that the lease only had three provisions and none of them imposed liability for fire damage on the defendant. A security deposit and a provision requiring the property to be returned in the same clean condition do not show the intent that the defendant should be liable for fire damage. The court also noted that defendant paid rent, which caused defendant to obtain the status of co-insured as to the fire policy.
Auto Owners Insurance Co. v. Callaghan, 2011 IL App (3d) 100530, 952 N.E.2d 119, 351 Ill.Dec 746 (Ill. App. 3 Dist., 2011), No. 3-10-0530
