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The Home “Where You Reside”d Might Not Be Covered

The Home “Where You Reside”d Might Not Be Covered. by Bill Wilson, CPCU, ARM, AIM, AAM

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The Home “Where You Reside”d Might Not Be Covered

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  1. The Home“Where You Reside”dMight Not Be Covered by Bill Wilson, CPCU, ARM, AIM, AAM Do you ever have insureds go into nursing homes and not come out, insureds who unexpectedly relocate, insureds who move out in the night during a foreclosure, insureds who temporarily rent their homes, insureds whobuy homes for their parents/children, insureds who allow a homepurchaser to move in before the closing, insureds who renovate anewly purchased home before moving in…often without yourknowledge. Did you know that all of these insureds may haveNO coverage on their dwellings? This session begins at 11:00 a.m.

  2. ISO HO-3 Coverage A SECTION I – PROPERTY COVERAGESA. Coverage A – Dwelling 1. We cover:a. The dwelling on the“residence premises” shown in the Declarations…

  3. “Residence Premises” 11. “Residence premises” means: a. The one family dwelling where ‘you’ reside; b. The two, three or four family dwellingwhere ‘you’ reside in at least one of the family units; or c. That part of any other buildingwhere ‘you’ reside; and which is shown as the “residence premises” in the Declarations.

  4. Nursing homes Relocations Foreclosures (lender in for a BIG surprise) Rentals Child occupies parent’s home Parent occupies child’s home Divorce Illness of insured Death of insured Trusts Homes owned by LLCs and corporations Seller moves out after closing Seller moves out before closing Buyer moves in or takes possession before closing Renovations / homes under construction Unoccupancy Vacancy Scenarios

  5. NO COVERAGE Bryan v. United States Fire Ins. Co. (Texas, 1970) Fisher v. Indiana Lumbermens Mutual Ins. Co. (Texas, 1972) Doyle v. Members Mutual Ins. Co. (Texas, 1984) Epps v. Nicholson (Georgia, 1988) Shepard v. Keystone (Maryland 1990) Nancarrow v. Aetna Casualty & Surety Co. (Arkansas, 1991) Georgia Farm Bureau Mutual Ins. co. v. Kephart (Georgia, 1993) Heniser v. Frankenmuth Mutual Ins. Co. (Michigan, 1995) Ivanov v. Phenix Mutual Ins. Co. (Maine, 2007) COVERAGE O'Neil v. Buffalo Fire Ins. Co. (New York, 1849) Joyce v. Maine Ins. Co. (Maine, 1858) German Ins. Co. v. Russell (Kansas, 1902) Reid v. Hardware Mutual Ins. Co. (South Carolina, 1969) Insurance Co. of North America v. Howard (Oregon, 1982) Farmers Ins. Co. v. Trutanick (Oregon, 1993) FBS Mortgage Corporation v. State Farm (Illinois, 1993) Hill v. Nationwide Mutual Fire Ins. Co. (Georgia, 1994) Lunquist v. Allstate Ins. Co. (Illinois, 2000) Case Law

  6. Claims Experience • $186,000 renovation claim • $100,000+ condo rental claim • Others? Email bill.wilson@iiaba.net

  7. Reasons FOR Coverage • “Where you reside” are words of description, not a warranty of occupancy. • Existing policy vacancy limitations and permits • Eligibility vs. coverage • Precedents (e.g., HO-6) • Relevance (PAP) • Hidden “exclusion” (not so in Section II) • Owner/occupancy vs. meth labs • “Onerousness”

  8. Solutions • Dwelling program? • Education • PR • Regulatory intervention • Legislative intervention • Form changes (wording removal,grace period, limitation likecommercial lines)

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