While homeowners insurance coverage protects an insured from financial loss when a residence is damaged by a covered peril, this form of coverage also provides a valuable shield against liability for personal injury lawsuits. Most people never expect to need their homeowners insurance carrier to provide indemnification or defense to personal injury claims. This false sense of security is misplaced because many third-party claims are made annually. For example, homeowners insurance companies processed over 17,000 claims for dog bites in 2013, which resulted in over $483 million in payouts according to the Insurance Information Institute (III).
Given the many property owners who must take advantage of liability coverage, an important issue that must be understood is who exactly can benefit from such coverage. While homeowners liability policies obviously cover the named insured, who is the homeowner, homeowners policies also extend to other family members who reside in the home. While this might seem straightforward, determination of whether someone is a covered “resident” can become a major issue of litigation. Although most teenagers and young adults at college continue to consider their parent’s home as their permanent residence, insurance companies will sometimes argue that the person who caused injury to another is not covered by the policy. However, courts in a number of states have ruled that children who are attending college out of state are still a “resident” in their parents’ home.
The Wisconsin case of Schaefer v. Taylor provides an example of the complex issues that can arise in determining whether someone is a resident for purposes of policy coverage. In this case, the son of the insured caused injury to another individual in December 2011 by crashing into the other person while riding a snowboard. The son of the insured was a full-time student who had not lived in the home of his parents since he graduated from high school three years prior to the accident. He also moved into his own apartment after he was discharged from the military in August 2011.
The insurance policy defined a resident as follows: “[A] student enrolled full-time, as defined by the school, who was a resident of your household before moving out to attend school, provided the student is under age 24 . . . and your relative.”
While courts analyze this type of provision differently, the Schaefer court focused on the language of the policy emphasizing the intent of the member of the household attending college. Because the son expressly indicated during his deposition that he did not plan on attending college or serving in the military when he moved out of his parents’ home, the court ruled that he did not qualify as a covered resident under the policy.
This case demonstrates the challenges that can be faced when the person trying to take advantage of liability coverage under a homeowners policy is a member of the household other than the named insured. This is just one of many complex issues that can arise when an insured pursues a homeowners insurance claim.
If you are having difficulties getting your insurance company to treat you fairly, you are welcome to contact my insurance claims dispute law firm. My law firm represents policyholders in claims disputes in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.