Generally when an insurance company has to pay out on a claim they have the right under the policy to subrogation which allows them to go after the responsible party. For example, if your furnace malfunctions causing a fire in your house and it was the result of a negligent installation by a company, your homeowner’s policy would pay for the fire damage loss and thereafter your insurance company would have the right to go after the furnace installer thereby stepping in your shoes to collect up to the amount it paid out to repair the damage to your house. However, under New Hampshire law, the tenant is considered a co-insured of the landlord with the respect to fire damage to at least a residential premises. Therefore, if the tenant’s negligence resulted in a fire, the landlords’ insurance company, after paying on the fire damage claim to the landlord, cannot go after the tenant because it has no right of subrogation against the tenant whose negligence caused the fire damage. The reasoning is that basic equity and fundamental justice upon which the equitable doctrine of subrogation is established requires that when fire insurance is provided for a dwelling, it protects the insurable interest of all joint owners including the possessory interest of a tenant absent an express agreement by the tenant otherwise. In a decision dated March 10, 2021 in the case of Daniel Ro v. Factory Mutual Insurance Company, As Subrogee of Trustees of Dartmouth College and Sebastian Lim v. Factory Mutual Insurance Company, As Subrogee of Trustees of Dartmouth College, the New Hampshire Supreme Court found that those two students Daniel Ro and Sebastian Lim likewise had a possessory interest in their dorm rooms such that the insurance company did not have a subrogation claim as a result of them using a grill on a platform that spread to the roof causing damage to the dormitory that the insurance company paid in the amount of $4,544,313.55.
J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at [email protected].