While homeowner's insurance coverage protects an insured from financial loss when a residence is damaged by a covered peril, homeowners insurance also provides a valuable shield against liability for personal injury lawsuits. Most people never expect to need their homeowner's insurance carrier to provide indemnification or a defense to a personal injury claim. This false sense of security is misplaced because thousands of personal injury claims are made annually. For example, homeowners insurance companies processed over 17,000 claims for dog bite cases alone in a recent year, 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, 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 homeowner's 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 homeowner's insurance claim.
You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].