Kemper Independence Insurance Company v. Islami (Insurance Denial for Concealment or Fraud)

In Kemper Independence Insurance Company v. Islami (2019AP488), the Wisconsin Supreme Court upheld an insurer’s denial of coverage based on the actions of a claimant’s estranged spouse.


In 2014, Ydbi Islami set fire to the home occupied by his estranged wife, Ismet Islami. The two had been legally separated since 1998; Ismet received sole ownership of the home as part of the separation. Ydbi deceived the home’s insurer, Kemper Independence Insurance Company, by concealing facts about his involvement in the fire. Kemper denied coverage to Ismet for the loss of her home, reasoning that the “concealment or fraud” condition in its insurance policy barred coverage for Ismet’s claims because of Ydbi’s conduct. The circuit court granted summary judgement in favor of the insurer and the appellate court affirmed. Ismet appealed.


Ismet argued that because of her legal separation from Ybdi, he is not her spouse and therefore not an insured, so the policy’s “concealment or fraud” condition could not be applied to her claim. Ismet also argued that the condition is ambiguous and conflicts with her policy’s “intentional loss” exclusion and therefore does not bar coverage for her claim. Ismet also asserted that she is an innocent insured and a victim of domestic abuse, and therefore the intentional act exclusion does not apply to her insurance claim under Wis. Stat. § 631.95(2)(f).

The Wisconsin Supreme Court upheld the appellate court’s decision and thus Kemper’s denial of coverage, explaining: “(1) Ydbi is an insured under the terms of the Policy, both under the plain language of the insurance contract and because Wisconsin’s marriage laws recognize Ydbi as Ismet’s spouse; (2) the Policy’s ‘concealment or fraud’ condition precludes coverage for Ismet—a conclusion unaffected by the Policy’s ‘intentional loss’ exclusion; and (3) Wis. Stat. § 631.95(2)(f) does not apply because the record lacks any evidence showing Ydbi’s arson constituted ‘domestic abuse’ against Ismet, as statutorily defined.”


Justice Rebecca Bradley delivered the opinion of the court, joined by Chief Justice Annette Ziegler and Justices Patience Roggensack and Brian Hagedorn. Justice Jill Karofsky filed a dissenting opinion joined by Justices Ann Walsh Bradley and Rebecca Dallet.