In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 16-3203

BARBARA STREIT and

WESLEY STREIT,

Plaintiffs-Appellees,

v.

METROPOLITAN CASUALTY 

INSURANCE COMPANY,

Defendant-Appellant.

____________________

Appeal from the United States District Court 

for the Northern District of Illinois, Eastern Division.

No. 15 cv 2461 — Sharon Johnson Coleman, Judge.

____________________

ARGUED DECEMBER 6, 2016 — DECIDED JULY 17, 2017

____________________

Before WOOD, Chief Judge, ROVNER and SYKES, Circuit 

Judges.

SYKES, Circuit Judge. On August 5, 2014, Wesley Streit Jr. 

set fire to the house where he lived with his parents, Barbara 

and Wesley Streit. At the time of the fire, the Streits’ home 

was insured by Metropolitan Insurance Company. Under the 

Streits’ insurance policy, Wesley Jr.’s act of arson triggered a
2 No. 16-3203

contractual exclusion of coverage. The Streits still submitted 

a claim, but pursuant to the policy’s language, Metropolitan 

refused to cover the fire damage. Barbara and Wesley Streit

sued, claiming that the exclusion in the Metropolitan policy 

was inconsistent with the Illinois Standard Fire Policy. The 

district court granted partial summary judgment in favor of 

the Streits, ruling that the Metropolitan policy impermissibly 

narrowed the coverage mandated by the Illinois Standard 

Fire Policy. We affirm. The Illinois Standard Fire Policy sets a 

minimum threshold for what fire-insurance policies must 

cover, and Metropolitan failed to provide that coverage.

I. Background

Metropolitan Casualty Insurance Company issued a 

homeowner’s insurance policy to Barbara and Wesley Streit 

that was effective from November 25, 2013, to November 25, 

2014. The policy insured the Streits’ home against risk of fire 

damage but contained an exclusion for losses arising from 

intentional actions by the policyholders.

The excluded events are listed below:

A. Intentional Loss, meaning any loss arising 

out of any intentional or criminal act committed:

1. by you or at your direction; and

2. with the intent to cause a loss.

This exclusion applies regardless of whether 

you are actually charged with or convicted of a 

crime.

In the event of such loss, no one defined as you

or your is entitled to coverage, even people de-
No. 16-3203 3

fined as you or your who did not commit or 

conspire to commit the act causing the loss. 

The policy goes on to define “you” and “your” as:

[T]he person or persons named in the Declarations and if a resident of the same household:

A. the spouse of such person or persons;

B. the relatives of either; or

C. any other person under the age of twentyone in the care of any of the above.

On August 5, 2014, Wesley Jr. committed an intentional 

act, which caused a loss, by setting fire to his parents’ home.

(He has since pleaded guilty to a charge of aggravated 

arson.) Because he is the son of Barbara and Wesley and 

resided in their household at the time of the fire, Wesley Jr.

was a “you” or “your” as defined by the insurance policy. So 

when the Streits submitted a claim to Metropolitan under 

the policy for losses and damages resulting from the arson, 

Metropolitan refused to pay.

The Streits sued Metropolitan in the Northern District of 

Illinois based on diversity jurisdiction. See 28 U.S.C. § 1332. 

Although the insurance policy itself excludes coverage for 

their son’s intentional act, the Streits argued that such an 

exclusion conflicts with the Illinois Standard Fire Policy—a 

standard baseline policy promulgated by the Illinois Director of Insurance pursuant to statutory authority. The Streits 

moved for partial summary judgment, which the district 

judge granted. The judge held that the Metropolitan policy 

must conform to the Standard Fire Policy but that a material 

question of fact remained as to whether the Streits played 

any role in directing or consenting to their son’s arson. The 
4 No. 16-3203

Streits and Metropolitan then stipulated that the Streits were 

innocent of any wrongdoing related to the fire, and based on 

that stipulation, the court entered judgment in favor of the 

Streits in the amount of $235,000. Metropolitan appealed.

II. Analysis

Under Illinois law the Director of Insurance is required to 

“promulgate such rules and regulations as may be necessary 

to effect uniformity in all basic policies of fire and lightning 

insurance issued in this State, to the end that there be concurrency of contract where two or more companies insure 

the same risk.” 215 ILL. COMP. STAT. 5/397 (1978). Pursuant to 

this authority, the Director of Insurance promulgated the 

Illinois Standard Fire Policy.

The Standard Fire Policy insures “against all direct loss 

by fire ... , except as hereinafter provided.” Standard Fire 

Policy, at 1, http://insurance.illinois.gov/prop_cas_is3_

checklists/statutes/StandardFirePolicy.pdf (capitalization 

omitted) (last visited July 17, 2017). The Policy provides the 

following express limitations on coverage:

This Company shall not be liable for loss by 

fire or other perils insured against in this policy caused, directly or indirectly by: (a) enemy 

attack by armed forces, including action taken 

by military, naval or air forces in resisting an 

actual or an immediately impending enemy attack; (b) invasion; (c) insurrection; (d) rebellion; 

(e) revolution; (f) civil war; (g) usurped power; 

(h) order of any civil authority except acts of 

destruction at the time of and for the purpose 

of preventing the spread of fire, provided that 
No. 16-3203 5

such fire did not originate from any of the perils excluded by this policy; (i) neglect of the insured to use all reasonable means to save and 

preserve the property at and after a loss, or 

when the property is endangered by fire in 

neighboring premises; (j) nor shall this Company be liable for loss by theft.

Id. at 2, lines 11–24.

The Standard Fire Policy also lists conditions that suspend insurance coverage. These include losses occurring

(a) while the hazard is increased by any means 

within the control or knowledge of the insured; 

or 

(b) while a described building, whether intended for occupancy by owner or tenant, is 

vacant or unoccupied beyond a period of sixty 

consecutive days; or 

(c) as a result of explosion or riot, unless fire 

ensue, and in that event for loss by fire only.

Id. at 2, lines 31–37.

Though the Illinois Supreme Court has yet to address the 

question, both the statutory text and Illinois appellate courts 

make clear that in the event of a conflict between an insurer’s policy and the Standard Fire Policy, the latter controls.

The Director of Insurance is required by statute to promulgate rules and regulations “to effect uniformity” among fireinsurance policies and to ensure “that there be concurrency 

of contract.” § 397. “Rules and regulations promulgated 

pursuant to authority delegated by specific provisions of the 

Insurance Code have the force of statute.” Lundquist v. 
6 No. 16-3203

Allstate Ins. Co., 732 N.E.2d 627, 630 (Ill. App. Ct. 2000) 

(citing Margolin v. Pub. Mut. Fire Ins. Co., 281 N.E.2d 728, 733 

(Ill. App. Ct. 1972)); cf. Williams v. New York Cent. R.R. Co., 

84 N.E.2d 399, 403 (Ill. 1949) (“The rules adopted by the 

Interstate Commerce Commission in the exercise of its 

authority to set standards of equipment are an integral part 

of the act and have the force of the statute.”). Furthermore, 

“[a]ll policies written in the State of Illinois must conform to 

the requirements of the Standard Policy.” Lundquist,

732 N.E.2d at 630 (citing ILL. ADMIN. CODE tit. 50, § 2301.100

(1961)); see also D’Agostino v. #7 Zimmie’s, Inc., 77 F. Supp. 3d 

719, 727 (N.D. Ill. 2014) (“[T]he [Illinois Administrative] 

Code provisions can clarify statutory law ... .”).

The coverage provided by the Metropolitan policy fails 

to conform to that required by the Standard Fire Policy. 

Under the Metropolitan policy, an intentional loss caused by 

any insured party suspends coverage for all insured parties—even those who were innocent of any wrongdoing. By 

contrast, the Standard Fire Policy suspends coverage if “the 

hazard is increased by any means within the control or 

knowledge of the insured.” Standard Fire Policy, at 2, lines 31–

32 (emphasis added).

The term “the insured” is not defined in the Standard 

Fire Policy. But as noted by many states interpreting identical language, the inclusion of the word “the” as opposed to 

“an” serves as a limitation. See, e.g., Osbon v. Nat’l Union Fire 

Ins. Co., 632 So. 2d 1158, 1159–60 (La. 1994) (“[T]he phrase

‘the insured’ refers to a specific insured, namely, the insured 

who (1) is responsible for causing the loss and (2) is seeking 

to recover under the policy.”). If one insured party commits 

an intentional harm but another insured party is innocent of 
No. 16-3203 7

any wrongdoing, then the insurance coverage is suspended 

only as to the insured who caused the loss. An innocent 

coinsured may still recover. See Icenhour v. Cont’l Ins. Co., 

365 F. Supp. 2d 743, 751 (S.D. W. Va. 2004) (“The Standard 

Policy exclusion, as construed, permits an innocent coinsured to recover policy proceeds even when a fellow 

insured engages in arson that destroys the insured property 

and premises.”); Century-Nat’l Ins. Co. v. Garcia, 246 P.3d 621, 

624 (Cal. 2011) (explaining that identical language found in 

California’s Standard Policy “protect[s] the ability of innocent insureds to recover for their fire losses despite neglectful or intentional acts of a coinsured); Trinity Universal Ins. 

Co. v. Kirsling, 73 P.3d 102, 106 (Idaho 2003) (“The great 

weight of persuasive authority shows that courts have found 

language referring to ‘the insured,’ such as that found in the 

standard policy exemptions, provides coverage to an innocent co-insured.”); Nangle v. Farmers Ins. Co. of Ariz., 73 P.3d 

1252, 1257 (Ariz. Ct. App. 2003) (“The increased hazard 

provision in Arizona’s Standard Policy, by using the term 

‘the insured’ rather than ‘any insured’ or ‘an insured,’ 

evidences an intent to allow recovery by innocent coinsureds.”); see also Volquardson v. Hartford Ins. Co. of the Midwest, 647 N.W.2d 599, 609 (Neb. 2002); Lane v. Sec. Mut. Ins. 

Co., 747 N.E.2d 1270, 1272 (N.Y. 2001); Watson v. United Servs.

Auto. Ass’n, 566 N.W.2d 683, 691 (Minn. 1997); Osbon, 632 So. 

2d at 1160; Borman v. State Farm Fire & Cas. Co., 521 N.W.2d 

266, 268–70 (Mich. 1994); Fireman’s Fund Ins. Co. v. Dean, 

441 S.E.2d 436, 438 (Ga. Ct. App. 1994).

Under the Illinois Standard Fire Policy, Wesley Jr.’s intentional act of arson suspended insurance coverage only as 

to him. Barbara and Wesley Streit may still recover. Any 
8 No. 16-3203

attempt by Metropolitan to proscribe their recovery is 

invalid and unlawful. 

Despite Metropolitan’s contentions to the contrary, this 

understanding of the Standard Fire Policy is not jeopardized 

by any public policy concerns. True, Illinois public policy 

holds that an agreement “to indemnify against willful 

misconduct would, as a general rule, be ... unenforceable.” 

Davis v. Commonwealth Edison Co., 336 N.E.2d 881, 885 (Ill. 

1975). This is rooted in the common-sense principle best 

stated by Judge Cardozo: “[N]o one shall be permitted to 

take advantage of his own wrong.” Messersmith v. Am. Fid.

Co., 133 N.E. 432, 433 (N.Y. 1921). But under the Standard

Fire Policy, the insured does not recover damages caused by

his own wrong.1 The Standard Fire Policy suspends coverage for loss occurring “while the hazard is increased by any 

means within the control or knowledge of the insured.” 

Standard Fire Policy, at 2, lines 31–32. Both public policy and 

the Standard Fire Policy prevent an insured party from 

intentionally destroying his property in order to reap the 

insurance profits. Barbara and Wesley Streit do not seek 

insurance coverage for damage caused by their own intentional actions but rather for the intentional actions of some-

 

1 According to Metropolitan, the district court’s understanding of the 

Standard Fire Policy violates public policy. In support Metropolitan 

quotes from the district court’s opinion: “Nowhere does the Standard 

Policy exclude coverage for intentional conduct, including arson, and 

therefore fires caused by intentional conduct must be covered ... .” But 

Metropolitan cuts off the most crucial part of that sentence: “[F]ires 

caused by intentional conduct must be covered if all other conditions are 

met.” One of these “other conditions” that must be met is that the hazard 

may not be caused or increased by the insured.
No. 16-3203 9

one else—their son. This does not conflict with Illinois public 

policy.

Finally, the Standard Fire Policy’s treatment of innocent 

coinsureds is not foreclosed by any Illinois statute. The only 

statute cited by Metropolitan that even mentions innocent 

insureds provides the following:

(a) No company issuing a policy of property 

and casualty insurance may use the fact that an 

applicant or insured incurred bodily injury as a 

result of a battery or other violent act committed against him or her by a spouse or person in 

the same household as a sole reason for a rating, underwriting, or claims handling decision.

(b) If a policy excludes property coverage for 

intentional acts, the insurer may not deny 

payment to an innocent co-insured who did 

not cooperate in or contribute to the creation of 

the loss if the loss arose out of a pattern of 

criminal domestic violence and the perpetrator 

of the loss is criminally prosecuted for the act 

causing the loss. ...

215 ILL. COMP. STAT. 5/155.22b (2004). 

This statute creates a baseline rule that applies to all 

types of insurance policies, not just fire insurance. It provides guidance if a policy excludes coverage for intentional 

acts. It does not explain when a policy must (or must not) 

exclude coverage for intentional acts. This question, left 

open by the statute, is answered by the Standard Fire Policy:

The Standard Fire Policy suspends coverage for intentional 
10 No. 16-3203

losses only as to the acting insured. Coverage for innocent 

insureds like Barbara and Wesley remains intact.

Because the Metropolitan policy fails to provide the minimum coverage outlined in the Standard Fire Policy, the 

judgment of the district court is

AFFIRMED.