In a joint-owned property, there can be more than one insured in an insurance policy. When one insured causes a loss through wrongdoing, the other insureds are considered “innocent insureds.”
When the innocent insureds submit a claim to the insurer for the loss, an issue arises as to whether the claim should be paid because it would benefit the insured who committed the wrongdoing.
For example: A husband and wife obtain a homeowner’s policy on their jointly owned home. Their relationship ends in an unfriendly divorce. The wife burns down the home out of spite. The insurance dilemma is:
As per the modern insurance interpretation, the courts are allowing an innocent insured to claim insurance money so that he should not be penalized for another insured’s wrongdoing.