Breach of "Cooperation" Condition Leads Insurer to Deny Burglary Claim

Homeowner	Theft Exclusion
Cooperation	Fraud

Insureds filed a claim under their renters policy, which provided coverage for personal property against risks of loss except for those specifically excluded. They made a claim for a significant loss of expensive items due to burglary. The coverage amount was $300,000, and the claim was roughly $80,000.

A series of disclosures during the insurer's investigation and the insureds' responses led to the insurer's denial of coverage for breach of their contractual obligation to cooperate during the investigation. The insureds then sued the insurer for breach of contract.

The insurer sought summary judgment, citing the insureds' refusal and failure to provide requested and necessary information. Alternatively, it argued that misrepresentation or concealment of material facts in the insurance application submitted by the insureds relieved it from liability. The insureds appealed the trial court's grant of summary judgment in favor of the insurer and the case's dismissal.

The appeal court was convinced by the following suspicious circumstances surrounding the case, as revealed in testimony: the insureds blamed their loss on a maid but could not provide her last name or how to contact her; they failed to produce proof of payment to the maid by check; they did not supply purchase receipts or other evidence of the value or existence of the majority of the items allegedly stolen; when it became clear that the couple's income was insufficient to have purchased such property, the woman stated that her mother had given them substantial sums but could not or would not disclose her mother's name and address; income tax returns had not been filed for over ten years, and there was evidence of credit card payment default and fraud.

The court ruled that the insureds' failure to cooperate relieved the insurer of any responsibility regarding the claim. It was unnecessary to discuss concealment of material facts in the insurance application about a prior large loss.

The judgment of the trial court was affirmed in favor of the insurer and against the insureds.

Held ET AL., Appellants v. Vigilant Insurance Company, Respondent. Washington Court of Appeals, Division One. No. 33980-0-l. April 24, 1995. CCH 1995 Fire and Casualty Cases, Paragraph 5285.