Editor’s note: Robert Bruss is temporarily away. The following column from Bruss’ “Best of” collection first appeared Sunday, June 11, 2006.

Homeowners Derrick and Carol Scott have a homeowner’s insurance policy with Allstate Insurance Co. On April 16, 2004, a fire severely damaged their home and its contents.

Derrick Scott stated that on the day of the fire he noticed a “wet spot” on the floor of his garage. He decided to investigate the nature of this “wet spot” by lighting it with a match.

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When he dropped the match to the floor, the liquid ignited and flames shot into the air. Derrick then tried, unsuccessfully, to prevent the spread of the fire.

After evaluating the evidence regarding the fire, Allstate denied the fire damage claim. Allstate argues it denied the coverage because the fire damage to the home was not “accidental” as required by the homeowner’s insurance policy, but Derrick intentionally dropped a match into the unknown liquid, thus causing the loss.

Allstate pointed to several clauses in its insurance policy that exclude coverage for intentional acts of the insured. But the Scotts argued this was a “sudden and accidental” direct loss, which is covered by the policy.

If you were the judge, would you require Allstate to pay for the fire damage caused by Derrick’s dropping a match into a “wet spot” in the garage?

The judge said no!

“The term ‘accidental’ as used in an insurance policy means ‘an unexpected happening without intention or design.’ Its inclusion makes it clear that the insured is not protected against loss resulting from his own intentional and malicious acts,” the judge explained.

“Derrick Scott, the insured plaintiff, deliberately applied a lit match to an unidentified liquid, a liquid he admits he knew may have been a flammable substance such as gasoline or antifreeze,” he continued.

“The insurance contract excludes intentional acts by the insured if the loss that occurs may be reasonably expected to result from such acts. Therefore, not only is the plaintiffs’ loss not accidental, meaning unexpected or unforeseen, but it is also expressly excluded under the insurance contract because it was reasonably expected to occur,” the judge emphasized.

Therefore, Allstate has no fire loss liability to Derrick and Carol Scott under their homeowner’s insurance policy, the judge ruled.

Based on the 2006 U.S. District Court decision in Scott v. Allstate Indemnity Co., 417 Fed.Supp.2d 929.

(For more information on Bob Bruss publications, visit his
Real Estate Center

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