When a woman remarried her former husband, she was the sole owner of the house that they occupied and was the named insured in an applicable dwelling insurance policy. The dwelling was destroyed by fire, but the woman's insurer denied her claim on the contention that the loss was caused by arson committed by her husband, which was confirmed. In the course of legal action, an appeal court affirmed trial court judgment in favor of the insurer on the basis of an "intentional loss" exclusion in the policy.

The Louisiana Supreme Court undertook review of the decision, the issue being whether the named insured was barred from recovery under the policy because the fire was intentionally set by her husband. It verified that mandatory standard fire policy provisions in Louisiana included a provision relieving the insurer from liability for loss occurring "....while the hazard is increased by any means within the control or knowledge of the insured."

The court found "the insured" ambiguous and, noting that the owner of the dwelling was not responsible for its destruction and that she did nothing to increase the hazard, determined that she was not barred from seeking coverage under the mandatory statutory provisions of the state's standard fire policy. The court said that the language of the policy under which claim was made excluded coverage "....when an intentional act is caused by the named insured or a spouse who is resident of the household." It concluded that, since coverage was not provided "....in conformity with or in excess of the standard fire policy form, reformation of the policy to conform with the standard fire policy form is appropriate."

The judgment of the court of appeal was reversed in favor of the named insured and against the insurance company.

Editor's Note: The Louisiana Supreme Court made observations (based on conclusions of a majority of courts) about the meaning of the word "insured" that are instructive and helpful, focusing on the article modifying the word. Any innocent coinsured could not recover when another insured committed arson and policy language excluded coverage when such an act is perpetrated by "any insured" or by "an insured." The use of "the insured," however, would bar coverage only for the perpetrator and permit it for the innocent insured.

(OSBORN ET AL., Plaintiffs v. NATIONAL UNION FIRE INSURANCE COMPANY, Respondents. Louisiana Supreme Court. No. 93-C-1975. February 28, 1994. CCH 1994 Fire and Casualty Cases, Paragraph 4668.)