A standard term in a homeowners policy is “residence premises.” However, a dispute can arise regarding the interpretation of this term when an insured either moves and does not advise his insurance carrier or if the insured is not living at the property on the date of loss.
In a recent case before the Michigan District Court of Appeal, the issue was whether an insured could only be a resident of one home at a time, in determining whether the phrase “residence premises” was ambiguous.1 The insured purchased a home in October 2013, however did not move into it right away. In fact, the seller remained in the home for 6-7 weeks. Between December 2013 and March 2014, the insured made several repairs to the home. These included replacing the furnace and painting. During this time, the utilities were connected and the home was heated. However, the insured’s wife, who was pregnant, lived at a family member’s home because she did not want to move into the home until all renovations were completed. Her husband moved some clothing and furniture into the home and worked there during the day, but he also slept at the other home in the evening. He did not change his address on his driver’s licenses or employer’s records, with his bank or cell phone provider, or postal service.
In March 2014, the water pipes froze and burst, causing damage to the insured property. The carrier denied the claim on the basis that the insured was not living in the home on the date of loss.
The policy defined “residence premises” as follows:
a. The one family dwelling where you reside;
b. The two, three or four family dwelling where you reside in at least one of the family units; or
c. That part of any other building where you reside;
and which is shown as the “residence premises” in the Declarations. “Residence premises” also includes other structures and grounds at that location.
The court reasoned:
[I]n the instant case the policyholder was physically present at the insured premises on nearly a daily basis, for “eight to ten hours a day,” Pl.’s Dep. at 51, doing various things including cleaning, painting, meeting with friends and contractors, eating, teleworking, exercising, and showering. Defendant does not point to any policy language, or to any case law interpreting the terms “dwelling” or “residence premises,” to suggest that plaintiff was required, lest coverage be denied, to live solely at the Fantasia property, or to spend a certain minimum number of hours there on a daily or weekly basis, or to sleep there, or to eat particular meals there, or to have his mail delivered there, or to keep any particular amount of clothing or furniture there. The Court agrees with defendant that the policy language is not ambiguous because the Michigan courts have defined it: Plaintiff was required to reside at the Fantasia property in order for defendant’s policy to afford coverage, and “reside” means he had to occupy the house and live there, be physically present there, and not use the house merely as a place of “temporary sojourn.” Defendant has not shown that plaintiff was not living there, and plaintiff has shown the contrary. The evidence clearly shows that plaintiff was living both at the Fantasia property and at the Monticello property at the time of the March 2014 loss, as he was spending his days at the former and eating dinner and sleeping at the latter. Defendant points to no authority suggesting that plaintiff may reside/live/dwell at only one house.