The right to claim proceeds under a fire insurance policy passes to the heir that has a direct interest in the insured property.
A devisee of a cottage and land were entitled to insurance proceeds for the damage to the cottage where the Testator died from smoke inhalation before the cottage was substantially damaged.
Here is the citation: Clements Estate (Re) [2007] N.S.J. No. 248. Nova Scotia Supreme Court. D. MacAdam J. June 1, 2007.
Here is a link to the decision.
This case was originally digested by Jonathan Meadows and edited by David Pilley.
The Testator willed his land and cottage to one of his children and her husband and the rest of his estate to another group of heirs. He died in the fire that damaged the cottage.
The Fire Investigator had provided a report in which he concluded that the Testator died from smoke inhalation before the cottage was substantially damaged. The Executrices of the will of the Testator applied for directions as to whether the heirs of the estate or the heir of the interest in the cottage were entitled to the insurance proceeds for the damaged cottage.
The Court held that, based on the evidence of the Fire Investigator, it appeared the Testator died before there was any substantial damage to the cottage. Consequently, the cottage passed to the personal representative of the deceased, with the beneficial interest to the heirs of the estate at the time of his death. As the "substantial damage" occurred after the "legal" and "beneficial title" had passed, the insurance proceeds were likewise payable to the heirs that had an interest in the cottage as opposed to the estate.
Im a little confused whether the insurer had died in the fire or during the fire how would that of in any way affected whether the existing policy would of been covered...especialy if he had heirs. and upon his death that policy would immediately transfer over to his heirs..
I hope this helps: if the cottage was destroyed before the insured died, the insurance proceeds would go to the estate, the child and her husband who had an interest in the cottage would receive any remaining benefit arising from the burned down cottag. Since the insured died before the cottage was destroyed, the child and her husband received the interest in the cottage and thus the benefit of the insurance policy on the cottage. In both cases the child and her husband receive the same benefit - the cottage - however the cottage is worth less after it burns down, so it is important to determine which cottage the child and her husband receive under the will.
It might assist in understanding the principle if you were to imagine that the insured died in an event independent from the fire; for example if he died of a heart attack the day after the fire - the insurance proceeds would go to the estate and the child and her husband would have the right to the burned down cottage and any benefits flowing form it.
I should also stress that this is not a general principle of law, but a result that arises directly from the wording of the insurance contract and the will.
I hope this helps.