Court Opinion

ID: 6032454
Source: CourtListenerOpinion
Date Created: 2022-01-13 12:59:28.516486+00
Date Added: 2024-06-11T08:51:19.498404
License: Public Domain

Hayes and Pigott, Jr., JJ.
(dissenting). We respectfully dissent. In our view, the definition of “insured” under the general policy provisions of the contract should not be applied to expand the persons subject to exclusion from coverage for intentional acts committed by “an insured” under the principal property coverage of the policy. To define “insured” to mean “you and, if residents of your household, your relatives, and any other person under the age of 21 in your care or in the care of your resident relatives” violates two sections of the Insurance Law.
Section 3401 of the Insurance Law requires that the person benefitting from an insurance policy on property have an insurable interest in the property. The broad definition of “insured” in this policy includes the minor son of the owner, who does not have an insurable interest in the property. Insurable interest is defined as “any lawful and substantial economic interest *1102in the safety or preservation of property from loss, destruction or pecuniary damage” (Insurance Law § 3401; see also, Weissman v Galway Constr. Corp., 239 AD2d 410, 411). Although the term “insurable interest” is to be liberally construed, we believe that it cannot be stretched so far as to include minor children merely because they reside with the insured. Although a legal or equitable interest in the property is not necessary to sustain an insurable interest, it is necessary that the insured have “ ‘a right in or against the property which some court will enforce upon the property, a right so closely connected with it and so much dependent for value upon the continued existence of it alone, as that a loss of the property will cause pecuniary damage to the holder of the right against it’ ” (Scarola v Insurance Co., 31 NY2d 411, 413). The owner’s minor son does not hold such an interest.
In addition, section 3404 of the Insurance Law contains the form of the standard fire insurance policy of the State of New York and mandates its use. A policy, such as the one in this case, that insures against the peril of fire must contain “terms and provisions no less favorable to the insured than those contained in the standard fire policy” (Insurance Law § 3404 [f] [1] [A]). Here, by including persons who do not have an insurable interest in the property as defined by section 3401, the policy contains terms and provisions less favorable to the insured than those contained in the standard fire policy; therefore, the policy violates section 3404 of the Insurance Law.
The cases relied upon by the majority for the proposition that a minor son has an insurable interest are not controlling because they involve personal property coverage rather than property damage coverage (see, e.g., Kradjian v American Mfrs. Mut. Ins. Co., 206 AD2d 801, 803). In our view, to hold that plaintiff, the sole owner of the property, has no fire insurance coverage because the fire was intentionally set by her minor son, deemed an insured although he has no insurable interest in the property, and in whose acts plaintiff had no complicity, impermissibly deprives an innocent owner of coverage (see, Welch v Commercial Mut. Ins. Co., 119 Misc 2d 630).
This Court’s decision in Branch v Chenango Mut. Ins. Co. ([appeal No. 2], 225 AD2d 1079) does not compel the result reached by the majority. In that case, we held that a wife could not recover for a fire loss caused by the intentional act of her husband. The husband was an insured under the policy and a co-owner of the property with his wife as tenants by the entirety; therefore, he had an insurable interest in the property. *1103The majority’s reliance on Allstate Ins. Co. v Mugavero (79 NY2d 153) is likewise misplaced because that case did not involve the peril of fire. (Appeal from Order of Supreme Court, Monroe County, Siracuse, J. — Summary Judgment.) Present— Pine, J. P., Hayes, Wisner, Pigott, Jr., and Boehm, JJ. [See, 175 Misc 2d 616.]