Multiple Residencies, Laundromats and Undeclared Premises

Both the ISO homeowners and personal auto policies cover resident relatives as insureds. What if a covered loss happens to a child who is away at college and whose divorced parents have joint custody? Is the child a resident of only one or both households, relative to coverage?

In the Florida case of Progressive v. Wesley, a child was killed in an automobile accident. At the time of the accident, her parents were divorced and the father had primary custody, though both parents shared parental responsibility. The child kept a room at the home of both parents.

Coverage was afforded under the policies of both parents. “Either determination of [the child’s] residency would be reasonable. We must accept the interpretation which would favor the insured,“ the court ruled.

In the Ohio case of Prudential v. Koby, the court ruled a 32-year-old captain in the U.S. Army held dual residency at his home and his parents’ house. The court said: “There was no requirement that, in order for a person to be a resident of the named insured’s household, such residence must be the sole or exclusive residence of the person.”

Residency depends on the facts of each case, but there is ample case law to demonstrate that a child can be the resident of more than one household.

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Building coverage includes personal property that is used to maintain or service the building or structure or premises, including appliances used for refrigerating, ventilating, cooking, dishwashing or laundering. Does this apply to any laundry equipment, such as a public Laundromat, or only to equipment that is used to service the building, such as an in-house hotel linen laundry?

For a complete analysis of the question, including the recommendation of an often-overlooked ISO endorsement that could resolve the coverage dilemma, visit the Virtual University.

An agent posed this question to the Virtual University’s Ask an Expert service:
“The named insured is a corporation. The sole stockholder personally owns a piece of land on which the corporation parks its vehicles. A pedestrian tripped on the premises and is suing the insured corporation.

“The location of this land was not specifically scheduled as a location on the policy. The insurer of seven years is denying the claim on the basis of misrepresentation, that the insured didn’t declare the location.
Is this correct?”

The carrier’s position is puzzling, given that the corporation doesn’t own the land. That being the case, why would it declare premises it doesn’t own or use for business purposes? Must corporations now list property owned solely by their stockholders?

How the corporation can be liable for the loss is another matter to be left to the attorneys. At issue here is whether a defense is owed under the CGL policy.

Application information typically consists of representations, not warranties. The insured is covered for BI and PD anywhere in the “coverage territory.” Unless the claim rep can cite an exclusion that removes this broad coverage grant, it’s covered. The cited condition doesn’t do anything unless the insured is being accused of fraud, misrepresentation or concealment.

In general, premises is an underwriting and rating issue, not a coverage issue absent a designated premises exclusionary endorsement, such as the CG 21 44. The “coverage territory” is all that matters. Have the adjuster point to a specific policy provision that removes coverage.

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