23 November 2012

Suicidal Fires

The Iowa Supreme Court has recently announced that fire by suicide is not very helpful. Normally, if married, both spouses are insured or are what are determined to be, co-insured. Presumably the purpose of house insurance is to provide money in the event it burns down. But let's not be too ready to presume. We buy the insurance and then months later actually receive the policy so that we can actually see what it says; and secondly, we don't read it anyway. We just presume that if anything happens to our house, we will be covered. Not so fast, says the Iowa Supreme Court. Presumptions can be dangerous. The Court in Postell v. American Family Insurance has recently decided that if one spouse sets the house on fire to commit suicide, the surviving party can't collect the insurance on the house. Whether the spouse attempting suicide succeeds or fails doesn't appear to be an issue. Regardless, the non-suicidal spouse is out of luck. This decision certainly benefits the insurance companies and it is uncertain how one is to protect oneself financially from a husband or wife who wants to off themselves other than to ask them to do it in a way that doesn't cause financial ruin to the survivor. In Postell, the bank with the mortgage was paid, but the court doesn't delve into the appropriateness of this as opposed to the Mrs. getting nothing. Apparently the bank was not an insured even though it was paid in full. I suspect that we now will each be required to have our own insurance policy-no more co-insured stuff. This applies to any situation where more than one person owns a residence married or no. If the person you lives with gets into a twit one day and trashes the place, you are out of luck. No money for you! It would be interesting to know, and I do not, whether two people can each have their own insurance policy on the same property. If not, too bad; if so, your insurance agent is now able to have two commissions rather than one and insurances companies are able to sell two policies thereby doubling their income. It looks like everyone is a winner except the homeowner.