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American Family Mutual Insurance Co. v. Guzik

406 Ill.App.3d 245, 941 N.E.2d 936, 347 Ill. Dec. 67 (3rd dist. 2010)

Words & Phrases

Exclusions: Intentional Act

Trial Judge

Michael J. Powers

Appellate Judge

William Holdridge


Homeowner’s policy does not cover damage resulting from an insured’s deliberate arson when the policy covers only “accidents” and explicitly excludes coverage for damage caused intentionally by the insured.

Fact Summary

Michael Guzik committed a deliberate act of arson. The resulting fire and explosion destroyed his own home, injured Guzik, and damaged four neighboring homes. American Family asked for declaratory judgment on whether it owed insurance coverage to Guzik. State Farm counterclaimed as subrogee of the neighboring property owners, arguing that American Family owed coverage to Guzik for the neighbors’ damages. The trial court granted summary judgment to State Farm, finding that American Family owed coverage.

American Family’s policy covered damages for which Guzik was legally liable because of injury or damage caused by an “occurrence” covered by the policy. The policy defined “occurrence” as an “accident” resulting in injury or damage. In addition, coverage was excluded for injury or damage caused intentionally by Guzik, even if the damage was different from what Guzik expected or intended.

The appellate court held that the trial court erred in granting summary judgment to State Farm. The court held that the policy language was unambiguous: the coverage applied only to accidents. An intentional fire is not covered because it is not accidental. And coverage is also excluded if the damage was caused intentionally by Guzik, even if the damage was different from what Guzik expected.

The court reversed the trial court’s grant of summary judgment. It issued a declaratory judgment for American Family that Guzik is not entitled to liability coverage from American Family for his neighbors’ damages.