In a case where arson is committed by the insured, how will the claim for a total loss of property be paid?

In a situation where arson is committed by the insured, the claim for a total loss of property is typically denied due to the intentional nature of the act. Insurance policies usually contain a provision that excludes coverage for losses resulting from intentional acts committed by the insured. This means that any claim made for losses arising from such actions would not be honored.

However, there can be exceptions regarding the mortgagee’s interests. In many cases, insurance policies are structured to protect the rights of mortgagees (lenders) as well. This means that, depending on the coverage provisions, the mortgage company may still receive payment up to the extent of their interests in the property, even if the insured's claim is denied due to their own actions.

Thus, while the insured might not receive payment for the total loss due to the arson, the mortgagee may still be compensated for the amount they are owed, reflecting a nuanced view of the contractual relationships involved in the insurance policy. This is typically done to ensure that lenders can recover their investments, protecting them against the insured’s wrongful acts.