A man and woman were co-owners of a house in which he remained with their two children after a divorce. She lived elsewhere. The divorce order had not made distribution of property. He purchased fire insurance on the dwelling two years after the divorce. It was destroyed by fire several years later. As the former husband was the sole named insured, the insurer paid the full amount of the claim to him.

The former wife filed a lawsuit against the insurance company and her former husband, claiming part of the proceeds based on her half interest in the property. The insurer sought summary judgment relieving it from further payment, based on West Virginia Code 33-17-12 as follows:

"Whenever the proceeds of or payment under a policy of fire insurance covering property located in West Virginia heretofore or hereafter issued becomes payable, and the insurer makes payment thereof to the person or persons designated in the policy or contractor if the proceeds have been assigned and written notice of such assignment given to the insurer, to the person or persons being entitled thereto by virtue of such assignment, such payment shall fully discharge the insurer from all claims under the policy or contract. . . ."

The insurer asserted that, by virtue of the statutory provision and its payment of the full amount of the named insured's claim, it was "fully discharged of all claims under the insurance policy. . . ." It bolstered its argument by contending that the divorced wife was not entitled to any of the policy proceeds because the insurance contract was not written for her benefit and she was not a party to it. The trial court, however, denied the insurer's motion for summary judgment and, on its own motion, granted summary judgment to the woman against the insurer in an amount one-half of the amount the insurer had paid to its named insured. The insurer appealed.

Citing numerous authorities and cases in point, the appeal court said: "It is well-established that a contract of insurance is a personal contract between the insurer and the insured named in the policy . . . . that an insurance policy is a contract of indemnity which pertains to the contract as opposed to the property being insured." It also cited Hartford Insurance Company v. Stablier, 47 S.2d 464 (La. App. 1985), as follows:

"It is a well established general principal of law that a policy of fire insurance is a personal contract between the insurer and the insured. A person who is not either a party to the insurance contract or one for whose benefit it was written is not entitled to a share of the insurance proceeds by the mere fact they have an insurable interest in property . . . . The mere fact a co-owner insures the entire property does not preponderate to establish he is acting for another co-owner."

Noting that the pertinent statute requires that an insurer shall pay only the "person or persons designated in the policy or contract" unless it was given a written notice of assignment, the appeal court reversed the decision of the trial court. It did state, however, that the divorced wife could seek to amend complaint "to include the theory of unjust enrichment" against her former husband.

(MAZON, Plaintiff-Appellee v. CAMDEN FIRE INS. ASSOC., Defendant- Appellant WV Supreme Court of Appeals. No. 18957. February 9, 1990. 389 S.E.2d 743. CCH 1990 Fire and Casualty Cases, Paragraph 2678.)