Opinion ID: 1258773
Heading Depth: 3
Heading Rank: 2

Heading: Policies' Coverage of the Same Interests for Same Insureds

Text: Blanding maintains, however, even if the Master properly considered the other insurance clauses to apply in a dispute between insureds, his analysis was still flawed because, in order for the other insurance clauses to apply, the policies must cover the same risk and same interest for the benefit of the same insured over the same period of time. She argues the policies cover different interests for the benefit of different insureds, and therefore the other insurance clauses are inapplicable. We disagree. Our courts have held that `[o]ther insurance' clauses are intended to apportion an insured loss between or among insurers where two or more policies offer coverage of the same risk and same interest for the benefit of the same insured for the same period. S.C. Ins. Co. v. Fid. & Guar. Ins. Underwriters, Inc., 327 S.C. 207, 212, 489 S.E.2d 200, 202 (1997). These clauses began their lives as an attempt to prevent fraud in the overinsuring of property. Id. Further, our courts have held that a mortgagor and mortgagee have separate and distinct interests in the same property which they may insure. Johnson v. Fid. & Guar. Ins. Co., 245 S.C. 205, 209, 140 S.E.2d 153, 155 (1965); Murdaugh v. Traders & Mechs. Ins. Co., 218 S.C. 299, 307-308, 62 S.E.2d 723, 726-27 (1950). While we agree with Blanding that she and Lender had separate and distinct interests in the property for insurance purposes, we disagree that, as a result, the two policies in question fail to cover the same interests for the benefit of the same insureds. Although the parties have separate insurable interests, it is possible for both to have contracted to insure the same insurable interest. Thomas v. Penn Mut. Fire Ins. Co., 244 S.C. 581, 585, 137 S.E.2d 856, 858 (1964). The policy issued by Foremost provided for $63,000 worth of coverage on Blanding's dwelling at her Pineville address, naming Blanding as the insured but also denoting Washington Mutual as the lienholder, as required by the mortgage agreement which states Blanding shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire and that [a]ll insurance policies required by Lender and renewals of such policies ... shall name Lender as mortgagee and/or as an additional loss payee. Accordingly, the Foremost policy, while insuring Blanding's interest in the property, likewise insured Lender's interest in the property. The American Security policy provided the named insured mortgagee was Washington Mutual Bank, and named Blanding as the additional insured. It likewise insured the property at Blanding's Pineville address stating, it is agreed that the insurance applies to the property described above and to any person shown as an Additional Insured with respect to such property.... It further noted [l]oss, if any, shall be adjusted with and payable to the above Named Insured Mortgagee, and the Additional Insureds as their interests may appear.... Thus, the American Security policy insured the same property, during the same period, against the same risk for the benefit of the same insureds. Both policies were intended to provide coverage for the mortgaged property that was security for the debt. Thus, the two policies, while insuring the parties' separate and distinct interests, each insured the same interest of the mortgagor and the same interest of the mortgagee. In other words, while Blanding and Lender may have separate and distinct interests insured by the policies, both policies insured both parties' interests. Accordingly, we find the two policies contracted to insure the same insurable interest, and there is no merit to Blanding's assertion that the other insurance clause in the American Security policy is inapplicable on this basis.