homeowners insurance liability; hypothetical situation

[justalayman]

What is the name of your state? Mi but actually looking for generic answer.

This is only a hypothetical. I frequent another website where this came up and am in need of insurance pro's input.

Concerning homeowers insurance.

If a homeowner knowingly hired an unlicensed contractor, in a state or area requiring licensure, and the improvements/repairs were the ultimate cause of a fire or some other damage typically covered by the insurance, can the insurance company deny payment to the homeowner due to the fact they knowingly allowed an unlicensed contractor to perform the work?

or;

would the insurance company make payment but possibly seek repayment from said contractor?

would failure to apply for a permit (a requirement by local codes) affect the situation?

 

[moburkes]

They'd more than likely pay up, then sue the contractor.

 

[justalayman]

Thanks Mo.

A bit of clarification though if you can.

Could they deny payment? I would think there is probably insurance regulation that would control this and I am extemely ignorant on insurance regs.

There was an analogy given at the other website that compared this situation to a driver driving drunk (illegal act) The insurance would still be required to pay but then may cancel the policy.

Are there any such clauses typically (or at all actually) included in homeowners policies that would require repairs/renovations to be performed according to local laws and/or ordinances or they would be able to deny liability based upon that point?
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[moburkes]

I'd have to look at some policies to review the exclusion clauses. Theoretically, they may be able to deny, but that denial would have to be based on the wording of the policy. So, if there is no exclusion, then they have to pay.

 

[justalayman]

Thanks Mo. Much appreciated.