No Coverage for Property that was not Insured’s “Primary Residence” as Described Under the Policy

A Maryland court recently ruled there was no insurance coverage available to an insured for a loss to her property that was not her primary residence.

In the case Liberty Insurance Corp. v. Barnes,¹ the district court ruled that the clear language of the policy barred recovery for the insured. In Liberty Ins. Corp. v. Barnes, the homeowner, Tracee D. Barnes (“Barnes”) purchased an insurance policy from Liberty Insurance Corporation (“Liberty”). On the insurance application, Barnes stated that the property was her primary residence and that no business was conducted on the property. During the policy period, the property was damaged by a fire. Barnes submitted a claim to Liberty.

While Liberty was investigating the claim, it discovered that the property was not Barnes’s primary residence, despite her assertion on the application that it was. Additionally, for years leading up to and at the time of the loss, Barnes leased the property to her business and used it as an assisted living facility.

The district court ruled for Liberty, holding that the policy unambiguously stated that the insured location was Barnes’s residence premises used for part or full-time personal occupancy. The court concluded that since Barnes had not resided at the property as stated under the policy, the property was not insured by the policy, and, therefore, Liberty was not liable for the loss.

Here, the clear language of the policy determined the outcome of the claim and case. Insureds should be certain to obtain the proper coverage for their property, or they could find themselves not covered for a loss.
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¹ Liberty Ins. Corp. v. Barnes, No. PX 17-2058 (D. Md. April 3, 2018).