A federal court recently held that an insurer may deny coverage under a homeowner’s policy for a “residence premises” when the insured never actually lived at the premises. In Sina Davani v. Travelers Personal Insurance Company and Geico Insurance Agency, LLC, Case No. 22-1244 (D. Kan. October 26, 2023), the District of Kansas granted defendant-insurer’s motion for summary judgment holding that the plaintiff-insured never resided at the insured premises and residence in the context of an insurance contract requires an insured’s physical presence at a certain location and an intent to remain at the location for an indefinite period of time.
Plaintiff made an insurance claim to his insurer Travelers Personal Insurance Company (“Travelers”) after discovering damage resulting from a water leak at his property in Wichita, Kansas (the “Property”). The policy provided coverage for Plaintiff’s “residence premises” which was defined in the policy as “[t]he one family dwelling or unit where you reside . . . and which is shown as the ‘residence premises’ in the Declarations.” The Declarations listed the Property as Plaintiff’s residence premises. Travelers began its investigation of the claim and retained the assistance of its Special Investigations Unit when it appeared Plaintiff may not have resided at the Property. During the claim investigation, Plaintiff filed suit for breach of insurance contract. Travelers subsequently filed a motion for summary judgment seeking dismissal of Plaintiff’s Complaint.
Travelers argued Plaintiff’s claim was clearly precluded because the policy unambiguously required that Plaintiff reside at the Property at the time of the claimed loss. Plaintiff conceded that he was not living at the Property at the time of loss, but argued that a reasonable insured could interpret the phrase “residence premises” in the policy to include a property that the insured may not currently reside in, but could use as a residence. Plaintiff also argued that because the policy contained certain exclusions for properties that are unoccupied for more than 60 days, the policy impliedly provides coverage for properties unoccupied for less than 60 days. Applying Kansas law regarding the interpretation of insurance contracts, the Court held that the policy’s definition of “residence premises” was not ambiguous and require actual residency. Further, citing to the Kansas Court of Appeals decision in Teter v. Corley, 2 Kan. App. 2d 540, 542, 584 P.2d 651, 653 (1978), the Court held that in the context of insurance contracts, residence requires an insured’s physical presence at a certain location and an intent to remain at the location for an indefinite period of time. Lastly, the Court found Plaintiff’s vacancy argument unavailing because Plaintiff did not deny that he failed to move into and live in the Property within 60 days. Thus, the Court held that Plaintiff failed to meet his burden showing he was entitled to coverage.
The District of Kansas’ decision that an insured’s actual residency at the insured property is required should encourage insurers to examine the definitions of “residence premises” in their homeowner’s policies to ensure that the definition conforms to the intended purpose of the policy. In addition, insurers should use clear and unambiguous language to guard against an argument that a policy does not require actual residency.