Alabama Court Upholds Insurance Policy Exclusions

Homeowners should know that insurers can deny claims if any insured person causes damage to a jointly owned property.

Updated on Oct. 26, 2026 in Insurance

Bold flat-color editorial illustration of a metal key resting on a red stone block, signifying Alabama insurance policy exclusions. — The Eleventh Circuit Court of Appeals ruled that Alabama insurers can legally deny property damage claims if a co-insured party causes the loss. AI Illustration. Upload story photo >

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The US Court of Appeals for the Eleventh Circuit ruled on August 11, 2026, that insurers in Alabama may enforce policy exclusions when an insured person intentionally causes a loss. This decision affects how homeowners insurance claims are handled when property is jointly owned by multiple parties.

Why it matters

This ruling clarifies that insurance companies can legally deny coverage if any insured person on a policy causes damage, even if other co-insured parties are innocent. For homeowners, it highlights the importance of understanding policy exclusions regarding the actions of other named insureds on a property.

The dispute involved a $500,000 insurance policy on a house in Centre, Alabama. An initial jury award of $425,000 was later reduced to $226,727.85 before the appellate court upheld the insurer's right to deny the claim based on policy exclusions.

The players

USAA

An insurance provider that offers property and casualty coverage to military members and their families.

Dennis Renfroe

A homeowner in Centre, Alabama, who sought insurance coverage following the fire destruction of his property.

Sherry Lambert

A co-owner of the property in Centre, Alabama, named in the dispute regarding the insurance claim.

The details

Under Alabama law, the court concluded that insurers are permitted to include provisions that exclude coverage for losses caused by any insured party. In this instance, the insurer denied the claim for a fire that destroyed a home because the policy excluded intentional acts, regardless of the involvement of other co-insureds. The court noted that because state law provides specific protections for domestic abuse victims but does not explicitly forbid other intentional-act exclusions, insurers may enforce those terms for other scenarios.

In January 2020, Dennis Renfroe and Sherry Lambert exchanged mutual warnings with their insurer about potential property damage.
The US Court of Appeals for the Eleventh Circuit issued its ruling on the insurance dispute on 11 August 2026.

Money Landscape

This decision reinforces the latitude Alabama insurers have to define the scope of coverage exclusions within policy contracts. It follows established trends where courts defer to contract language unless specific state statutes explicitly prohibit such terms.

Homeowners should review their insurance policy documents to confirm how intentional acts by any insured person affect coverage. If you have concerns about property coverage or multi-party ownership, consult with a qualified insurance professional to understand your specific policy terms.

The takeaway

This case underscores the importance of being aware of all parties named on your property insurance policy and the specific language regarding intentional damage. Consider reviewing your policy document and discussing any concerns about co-insured risks with a qualified insurance professional.