Tenant as implied co-insured

What is an implied co-insured?

Disputes about insurance coverage arise all the time. After all, someone will need to pay for the repair after an event that causes significant damage. Often, we look to insurance companies to pay. They often don’t want to.

Recently, the Court of Appeals, considered whether a commercial tenant is an “implied co-insured” under its landlord’s fire insurance policy. The case is Community Ass’n Underwriters of America Inc, v. Kalles, 164 Wn.App. 30 (2011).

The Harbour Commons condominium owners’ association had purchased a fire insurance policy. The Elkins owned a unit in the condominium which they leased to the Kalles. A fire partially destroyed the unit.

The Insurance Company paid to repair the damage and then sued the Kalles. The Insurance Company claimed that the Kalles had negligently used a space heater which caused the fire.

Kalles moved for summary judgment and asserted that they were “implied co-insureds” under the policy and that Washington law prohibits an insurer from suing its insured on a subrogation claim. The Court agreed with the Kalles and specifically held that, absent a clearly expressed agreement to the contrary, the law presumes a tenant to be a co-insured on the landlord’s fire insurance policy.

The tenant is an “implied” insured because they are not specifically named in the policy.

Does this case excuse a tenant from obtaining their own insurance? Absolutely not. There is nothing in this case that suggests that a landlord’s insurance policy would (or should) cover a tenant’s personal property.



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