They can but they probably won’t.

First off, they can’t "repo everything you own". State laws vary but are usually very specific about what can and can’t be seized, levied and or garnished in these kinds of situations. They usually cannot take you primary vehicle, your home, your retirement assets (annuities, etc.)

The picture you painted makes it sound like you don’t have much more than a pot to piss in. If that’s accurate, no insurance company is going to try seriously to collect from you because there’s nothing there to take.

Getting a judgment costs money and collecting on a judgment costs even more. Every insurance company does a cost benefit analysis before they undertake this kind of thing and if the chances of collecting anything are deemed too slim, they generally don’t proceed. We call it throwing good money after bad.

They’ll do an assets check on you and your friend and if they don’t turn up an Aston Martin registered to you or vacation property titled in your little buddies name, they’ll probably drop it.

After they harass you for six months or so.

Maybe.

After all, you did burn down that guys duplex, right?

(20 year claims veteran with the scar to prove it)

It’s called subrogation.

It means going after the at fault party.

The land lords policy gives the insurance company the right to pursue recovery from the person that caused the damage.

Your negligence caused the fire.
Your negligence caused the damage.
You are responsible for paying for that damage.

Renters insurance provides coverage for your property. It also provides liability coverage. Had you purchased renters insurance, there is a chance that would have paid the land lord’s company back. What’s really sad, renters insurance is cheap. When I rented, I paid less than $200 a year for it.

The insurance company can and will sue you.

Or you can call them up and work out an interest free payment plan.

If you can scrape together a lump sum, they may be willing to accept a lesser amount if paid in a lump sum. They would rather get a lesser amount in a payment or two than the whole amount over years.

And theft coverage is NOT automatically included on all Texas Fair Plan policies.