N.H RULES TENANT IS CO-INSURED:

The Supreme Court of New Hampshire recently ruled that a tenant is considered a co-insured of a landlord for fire damages and the insurer has no right of subrogation against the tenant. The ruling, Cambridge Mutual Fire Insurance Co. vs. Crete, also found that a tenant may not be held liable for uninsured fire losses unless the lease expressly holds the tenant responsible for such damages. In the case under review, a tenant’s smoking was blamed for a fire that caused extensive damage. The landlord’s fire insurance company paid for initial losses but the landlords later sustained additional uninsured losses. Cambridge Mutual brought a subrogation action against Crete for the amount paid to the landlords under the fire insurance policy; the landlord sought reimbursement from Crete for their uninsured losses. The case reached the state’s highest court when Cambridge Mutual and the landlords both appealed orders of the Superior Court in favor of defendant Crete. A tenant has a reasonable expectation that the landlord has procured adequate fire insurance not only for the real property, but also for any other landlord-owned property on the premises, the court found. In its opinion, the court said that if landlords were able to recover for uninsured losses caused by a tenant’s negligently caused fire damage, there would be little incentive for landlords to procure adequate fire insurance. Tenants would be placed in the situation where they must contemplate purchasing additional fire insurance for the leased premises as well as any personal property of the landlord on the premises. Tenants in this vulnerable position may lack sufficient knowledge about a landlord’s uninsured real or personal property to protect themselves. This would lead to the economic waste and duplicative insurance policies the Sutton doctrine aims to prevent, according to the court.