A House is Also a Home

Where You Reside Is A Question of Fact

Resident relatives are usually covered by insurance policies in the name of a parent or other relative. What is a residence, however, is a question fraught with danger and an insurer denies coverage to a person claiming to be a resident relative faces immediate and difficult litigation.

In Progressive Northern Ins. Co. v. Pedone, — N.Y.S.3d —- , 2016 N.Y. Slip Op. 0388, 2016 WL 2890048, Supreme Court, Appellate Division, Second Department, New York the insurer refused to insure under a supplemental underinsured motorist (SUM) coverage because the person making the claim was not a “permanent” resident of his parents household. The trial court disagreed and allowed the UIM arbitration to proceed.

FACTS

In September 2012, Jarrod Pedone, a pedestrian, was seriously injured when he was struck by a motor vehicle owned and operated by Timothy Kane in Philadelphia, Pennsylvania. Jarrod sought coverage under the SUM endorsement contained in his parents’ policy with the petitioner Progressive Northern Insurance Company (hereinafter Progressive). The SUM endorsement defined insured, in relevant part, as follows: “you, as the named insured and, while residents of the same household, your spouse and the relatives of either you or your spouse.”

Progressive denied coverage on the ground that Jarrod was not a resident of his parents’ household in Staten Island at the time of the accident and, therefore, was not an insured under the policy.

Jarrod served a demand for arbitration of his claim for SUM benefits, and Progressive commenced this proceeding to permanently stay arbitration. Following a framed-issue hearing, the trial court – Supreme Court – concluded that Jarrod was a resident of his parents’ household in Staten Island, and, in effect, denied the petition.

While a person can have more than one residence for purposes of insurance coverage a person’s status as a resident of an insured’s household requires something more than temporary or physical presence and requires at least some degree of permanence and intention to remain. The issue of residency is a question of fact to be determined at a hearing.

ANALYSIS

Here, the evidence supports the Supreme Court’s determination that Jarrod, an itinerant musician, resided in his parents’ household in Staten Island at the time of the accident.

Under the circumstances of this case, the proof in the record, including the presence of Jarrod’s personal belongings and professional equipment at his parents’ house, the numerous official documents listing his parents’ address as his residence, and the testimony adduced at the framed-issue hearing, sufficed to establish Jarrod’s residency in his parents’ household within the meaning of the subject insurance policy.

Accordingly, the Supreme Court properly denied the petition to permanently stay arbitration of the SUM claim.

ZALMA OPINION

The New York appellate court, applying its amazing ability to get to the issue quickly and briefly, established that Progressive failed to do a thorough investigation before deciding to deny Jarrod’s claim. Had it done a thorough investigation and learned the indicia of residence that the court relied upon it would not have brought the motion and would have adjusted his claim.

ZALMA-INS-CONSULT                      © 2016 – Barry Zalma

Barry Zalma, Esq., CFE, practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 49 years in the insurance business.  He now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes.

He founded Zalma Insurance Consultants in 2001 and serves as its only consultant.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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