Are intentional acts excluded from renters insurance? What does that mean to me? Aren’t all acts intentional, at some level? How does that impact my liability coverage? Even if I’m negligent, wasn’t the act still on purpose?
Those are great questions, and we love it when people read their policy and then ask us about the contents. There are a couple of angles to look at here, so let’s get started!
Intentional Acts Of Insured Excluded
Yes, the intentional acts of an insured are excluded from your renters insurance policy in Texas and everywhere else in the country. It’s part of every standard policy form, and you won’t find an endorsement that will remove that exclusion. So why is there even liability coverage available?
Not all of your acts are on purpose, even if the specific thing you did was calculated to some degree. Say what?
An “intentional loss” is one that an insured “commits or conspires to commit” for the express purpose of causing a loss, with regards to property coverage. That exclusion is specifically designed to negate the moral hazard of someone setting their home on fire to collect the money for their personal property coverage. Makes sense, right? It’s worth noting that coverage for all insureds on the policy would not be available if one insured caused the loss with intent.
The small damage to property of others coverage also includes similar language, with one caveat, but we’ll get to that caveat in a moment.
That’s Section I, property. With regard to Section II, Liability, the relevant language is found in the definition of “Occurrence.” Liability coverage applies for an “accident… which results, during the policy period, in bodily injury or property damage.” Those two concepts are also defined, but we’ll leave those alone for a moment as we’ve touched on them elsewhere.
It could be said that every action you do is an intentional act. That’s not what your renters insurance policy excludes. The key is the intention of the act. If you’re cooking dinner and turn away to answer the phone, and there’s a fire as a result, you would expect to have coverage under all parts of the policy. Your act of cooking dinner and answering the phone concurrently was not expected or intended to cause the loss.
“Expected or intended” are key concepts here, as well as “knew or should have known.” If you punch someone in the face, your expected and intended result is to injure them. As a result, you can generally expect that your liability coverage will not respond. You weren’t negligent – in fact, you were quite effective at getting the result that you wanted out of that action. You got the expected and intended results, and therefore there is no injury.
On the other hand, if you’re walking down the street talking to your spouse, and something in a store window catches your eye, and you stop to point that thing out to your partner, and in the process swing your arm wide to point to whatever it is, and in the process of doing so backhand the person behind you in the face, that’s a different story.
Your expected and intended result was to use your hand to indicate something specific to another person – that’s something that people do on a daily basis. That result is not what you got. Instead, the result of your action was to cause bodily injury to another person by striking them in the face. That was not the result you expected, intended, or desired.
In that situation, you were negligent because you knew or should have known that it was your duty to be aware of where your arm was and how it might affect other people if you made a sudden movement while walking down the street. Your renters insurance liability coverage is designed to cover exactly that sort of “occurrence.”
But What About The Children?
Yes, what about the children? Does renters insurance cover liability for kids? What if they got exactly the result they expected and intended, and that result was property damage or bodily injury to someone else, and that someone is not a party to the policy? Is there coverage?
Broadly speaking, yes. An insured child under the age of thirteen will generally not be assumed to have a full understanding of the consequences of their actions. Without that understanding, they can’t be assumed to have expected or intended the broad results. They might have expected that punching little Billy in the face would hurt him, but they would not expect or intend to cause fifty thousand dollars of medical bills for little Billy and his parents.
The latter is not an expected or intended result, and therefore the intentional act is generally likely to be covered when committed by a child, regardless of intent. This follows the same way if a child sets a leaf on fire with a magnifying glass, and the fire spreads to a housing development. The child intended to burn a hole through one leaf, and did not have any intention of the fire spreading, or of causing property damage to others.
Liability can be complex, and the concepts of expected or intended can be fluid. As a result, insurers can send what’s called a “reservation of rights” letter. Your insurer has the obligation to defend an insured against a claim under the policy. That obligation is significant, and the insurer usually is required to mount the defense if the claim could be covered under a policy. A reservation of rights letter simply means that the company will defend the insured initially, but they maintain the right to later determine that some or all of the claims in question are not covered under the policy and withdraw the defense and/or not pay or settle the claims.
To find out more about how your liability coverage works, or to buy a renters insurance policy, just call (800)892-4308 or click to get covered - whether you need Texas renters insurance quotes online or coverage anywhere else!
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