The holidays are a time filled with travel, gifts, and sometimes, added perils. Often, people travel to visit family and friends during the holiday season and bring their personal belongings with them. Although theft and other unpleasant possibilities may rarely cross the minds of travelers, it is important to consider coverage in the unfortunate event of loss.

In the case of Chalmers v. Oregon Automobile Insurance Company,1 the court considered insurance coverage for Christmas gifts and other personal belongings stolen at an insured’s temporary residence. In Chalmers, the insured maintained property insurance for his permanent residence in Klamath Falls, Oregon. However, the insured and his family temporarily resided at their home being constructed in Odessa, Oregon. The insurer’s representative orally assured the insured that his contents being stored at the Odessa location were likely covered by the homeowner’s policy for the Klamath Falls residence.

On December 19, 1969, the insured’s wife, son, and grandson brought Christmas gifts, food, clothes, and ski equipment to the Odessa property in anticipation of remaining there through the holidays. Later in the month, the insured and his family attended church in Klamath Falls and stayed in their home there overnight, intending to buy groceries in the morning and return to Odessa. When the family returned to Odessa, they discovered that much of their personal property had been stolen. They reported the loss to their insurer.

The insured’s homeowner’s policy stated, in relation to personal property, “this policy excludes any loss by theft…to any other residential premises, or property therein…except when in actual use as his or their temporary residence.” The insurer attempted to deny coverage for the stolen personal property and argued that the Odessa residence was not temporary, and was instead being used as a second residence. The insurer further argued that the insured and his family were not actually using or actually occupying the Odessa residence at the time of the loss, since they had stayed the night in Klamath Falls. While the trial court agreed with the insurance company’s argument, the case was reversed on appeal. The Supreme Court of Oregon concluded that ‘actual use’ could not be interpreted to mean that the premises must be occupied twenty-four continuous hours a day, and that the Odessa house was, in fact, being used as a temporary residence. Additionally, the court determined that any ambiguity in an insurance contract must be construed in a light most favorable to the insured.

As demonstrated by the court in Chalmers, personal property may be covered by an insured’s homeowner insurance policy even when the insured is away from home and is residing in a temporary home. Although this may offer some peace of mind to holiday travelers, it is important for insureds to read their homeowner insurance policies to determine whether they will be covered if loss to their personal property occurs in a temporary residence.
1 Chalmers v. Oregon Auto. Ins. Co., 500 P.2d 258, 262 Or. 504 (1972).