Policy Purchased by Mortgagee Does Not Insure Homeowner’s Hurricane Damage

    The court granted the insurer's motion to dismiss the homeowner's claim against the insurer because the policy insured the mortgagee, not the homeowner. Barbin v. Integon Nat'l Ins. Co., 2023 U.S. Dist. LEXIS 207192 (E.D. La. Nov. 20, 2023). 

    The home was damaged by Hurricane Ida. The homeowner claims that Integon National Insurance Company breached the policy and acted in bad faith by failing to make the required payments. 

    Integon moved to dismiss. The policy was purchased by Assurance Financial Group LLC, the holder of a mortgage on the property, after the homeowner failed to provide evidence that he had purchased adequate insurance. Integon argued that the mortgagee purchased the policy to protect its own interests in the property, not to protect the homeowner's interests. 

    The court agreed and granted the motion to dismiss. The language of the policy was clear. It stated, "Integon agrees to indemnify [the mortgagee] for a covered loss not to exceed the amount issued . . ." The notice of insurance further provided that "the contract of insurance is only between [the mortgagee] and Integon. There is no contract of insurance between the [homeowner] and Integon."

    Further, the homeowner was not an intended third-party beneficiary. The policy was purchased by the mortgagee "to protect [its] interest in the property." There was no intent to confer a direct benefit upon plaintiff.