Our insured, on a farm policy, had three barns on his property. There was a fire and two of the barns were burned completely, the main barn and a smaller barn. The insurance company paid for the main barn, but would not pay for the smaller barn since they claim that the picture that they received from the agent was not the barn that burned.

That is correct. The dimensions of the barn to be insured were correctly submitted to the company; however, the photo was mistakenly taken of another building on the property (insured elsewhere). The barn certainly would have qualified for coverage.

The company has refused to pay for the barn stating that they have an improper picture. What do you think?

Illinois Subscriber

A

Yes, the loss should be covered. The policy does not specify that loss settlement is contingent on an accurate photo. The underwriting department may request a photo of property to be insured prior to issuing a policy, but once the policy is issued a contract exists between the company and the insured. Unless the loss settlement provisions make some reference to the requirement, there are no grounds to deny coverage.

There was no intent on the part of the insured to defraud, and you state the barn that burned would have been acceptable to the underwriter. The loss is covered.