Failure to Reside at Dwelling Eliminates Coverage

FOR COVERAGE TO EXIST ON A HOMEOWNERS POLICY THE INSURED MUST RESIDE AT THE RESIDENCE

Barry Zalma

Jan 03, 2024

Transcript

BACKGROUND

Heh owned a home at 206 Parklane Drive in Braddock, Pennsylvania. At all times relevant to this case, Nationwide insured the risks of loss to the structure and contents of the home.

NATIONWIDE INSURANCE POLICY

Heh’s Nationwide Homeowner Policy names Heh as the insured and lists the Property on its Declarations under “Residence Premises Information.” At Page A1 of the Policy, under “Insuring agreement,” Nationwide avers that coverage is contingent on “compliance with all the policy provisions.” Coverage A (Dwelling) is described as coverage of “[t]he dwelling on the residence premises used mainly as your private residence, including attached structures and attached wall-to-wall carpeting.” Coverage C (Personal Property) is described as the coverage of “personal property owned or used by an insured at the residence premises.”

The term “residence premises” is defined as the “one, two, three or four-family dwelling, other structures and grounds located at the mailing address shown on the Declarations unless otherwise indicated.”

THE PROPERTY

Heh purchased the Property in 1990 and resided there with his wife until her passing. On January 1, 2019, Heh agreed to rent the Property and he and tenants entered a leasing agreement. There were indicia in the record that the agreement between Heh and his tenants provided for the possibility that the tenants would rent to own. There were also indicia in the record that Heh included his furniture-either for the tenants’ use during their occupancy or for the tenants to own-in the agreement.

After Heh leased the Property he moved to Point Pleasant Retirement Community. Once he moved into Point Pleasant, it is undisputed that Heh did not at any point move back to the Property.

FIRE AT THE PROPERTY

On February 3, 2020, before the tenants had fully moved out of the Property, there was a fire that resulted in significant physical damage to Heh’s home and the personal property inside of it. After the fire Nationwide investigated the cause of the loss and denied coverage “based upon the policy provision related to the occupancy of the dwelling.” In its investigation, Nationwide determined that Heh “had not resided in the residence premises for an extended period and had not notified Nationwide that the property was rented to tenants.”

Heh sued Nationwide and alleged that an adjuster had determined that the loss caused by the fire resulted in damages over the Policy limit of $172,400.00.

DISCUSSION

Nationwide, in its summary judgment motion, argued the Policy predicates coverage under both coverage provisions on the insured residing at the Property. Nationwide established that there was no factual debate about whether Heh was living at the Property.

Coverage A (Dwelling)

Nationwide argued that Heh’s failure to reside at the Property was an appropriate basis for denial of Coverage A (Dwelling). Because there was no dispute Heh did not reside at the Property at the time of the fire or for a significant amount of time prior thereto, Coverage A (Dwelling) was unambiguously unavailable to him. Such coverage was only available for the dwelling on the residence premises that is used “mainly” as the named insured’s private residence. Since the terms of Coverage A (Dwelling) are not reasonably susceptible to an interpretation that would entitle Heh to coverage where the Property was not being used “in the principal respect” or “more than anything else” as his private residence the Court granted Nationwide’s motion with respect to Heh’s allegation of breach of contract for failure to provide coverage under Coverage A (Dwelling).

Coverage C (Personal Property)

When the Policy is read as a whole and its meaning construed according to its plain language, Coverage C (Personal Property) is conditioned upon the named insured’s residence at the residence premises.

While the Court was not unsympathetic to Heh’s protestation that he should benefit from coverage when he lived at the Property and paid insurance premiums for decades before the 2020 fire, the Court concluded that it was required to give effect to unambiguous language of the Policy.

Nationwide’s Motion for Summary Judgment was granted and Heh’s Motion for Partial Summary Judgment was denied.

ZALMA OPINION

Anyone who reads a homeowners policy – as did the USDC – will see that it only provides coverage if the insured actually lives at the property that is the subject of the insurance. Heh left the residence and moved into a retirement facility. He did not tell his insurer of his move or attempt to obtain coverage for the property as a rental property that is commonly available. As a result of his decision to move Mr. Heh paid for insurance that provided no coverage for the loss to the property although it did provide liability coverage. I, as was the court, am not unsympathetic to the loss incurred by Mr. Heh, he has no one to blame for his loss but himself.