Richard decided to smoke in his garage. Unfortunately, his decision caused a fire. The fire damaged Richard's personal property in his duplex unit, the personal property of the tenant in the other duplex unit, and the entire building. Buckeye State's insured owned the duplex. After paying the policyholder's claim, Buckeye sued Richard for his negligence in starting the fire. Richard argued that, as a tenant, he was a coinsured under Buckeye's policy and not subject to subrogation.

Click here to see how the courts reacted to Richard's argument.

The landlord's negligence caused a fire. Great American, the tenant's insurer, paid its tenant's loss and then subrogated against the landlord. The landlord claimed it was a coinsured under the tenant's policy and not subject to subrogation.

Click here to see how the courts reacted to Great American's argument

The Rights of Recovery condition in insurance policies allow insurance companies to proceed against the parties that cause the loss. The insurance company can deny the claim if the insured interferes with that right after the loss. However, it is very important to read the condition carefully because most policies give the insured the right to relinquish any such rights of recovery in writing prior to a loss.

Click here to review the PF&M analysis of the Commercial Property Transfer of the Rights of Recovery Against Others to Us Condition.

Click here to review the PF&M analysis of a Homeowners Subrogation Condition

Many tenants resist purchasing Homeowners coverage. If Richard was one of those tenants, he would have to pay both the loss to his personal property and the cost to defend the suit brought by Buckeye. However, with Homeowners coverage, the insurance company pays the personal property loss and the cost to defend the liability suit.

Click here for two different emarketing articles you could attach to or insert in your website to encourage your tenant clients to purchase homeowners coverage.