The issue of whether an individual is a resident relative of the named insured often plays a crucial role in determining whether coverage is afforded or denied. For the most part, homeowners, dwellings and personal liability policies extend liability coverage if the individual is a resident relative of the insured. (Of course, there are exceptions, such as in the homeowners' forms for a person responsible for an animal owned by an insured.) And the personal automobile policy gives but also limits coverage for family members of the insured under certain circumstances.
The concept of resident relative status has been tested in litigation in varying circumstances and fact patterns. Several factors have been used by courts in determining resident relative or household member status, including living under one roof, physical presence or absence from the named insured's household, relationship of the individual to the named insured, and others. This discussion reviews the outcomes of legal actions in an attempt to give guidance in understanding the concept of resident relative status and its affect on coverage.
Most property and casualty policies extend coverage to members of the named insured's family or household under various conditions. Other policies, such as the personal auto policy, limit the coverage that is available to family members residing with the named insured. The language is not uniform in all forms, but the problem of just who is included in such extension or limitation arises regularly and is similar in many contracts.
It is difficult to draw many general conclusions from cases that have examined the issue of resident relative status. Each determination is closely tied to the particular facts of the case. However, a few generalizations can be made.
First, it has often been held that living under one roof, although a factor to be considered, is not sufficient for a finding one way or another. It is the totality of the relationship that is analyzed, including the intent of the parties. In the case of a minor, it may be the intent of a parent that is scrutinized. And, when the situation involves a separated but not divorced couple, the courts are often reluctant to deny coverage to one spouse since the intention to remain apart is not fully apparent until the divorce is finalized.
Courts usually, but not always, find that sons and daughters away at college or in military service are covered as resident relatives if they maintain the ties to the family home that are typical of that situation (coming home on leave, using the parents' address as their official address, etc.).
Further, children of divorced or separated parents who spend substantial time at the home of both parents can be considered as a resident of both households. But foster children, even those with long term relationships to the named insureds, are excluded from coverage unless the policy language specifically includes them in the definition of an insured.
Another principle found in these cases is whether the finding of resident relative status would be beneficial or against the interests of the person seeking coverage. It appears that many resident relative decisions are influenced by the desire to find coverage. For example, there may be a claim under a homeowners policy for loss of property belonging to a person who will only receive substantial coverage if he or she is a resident relative. On the other hand, except for the named insured and the spouse, an insured under an automobile liability policy may have nonowned automobile coverage only if the owner of the driven automobile is held not to be a resident of the household.
Finally, the one common denominator appears to be that the facts of each situation must be analyzed within the context of any existing case law in order to reach a conclusion.
Homeowners: Under the standard homeowners forms, the policy definition of insured includes the named insured (stated as you) and residents of the insured's household who are relatives or other persons under the age of twenty-one in the care of any insured. In the ISO 2000 homeowners program the definition has been broadened to specifically include a student enrolled in school full time, provided that prior to moving out the student was a household resident. The student may be under age twenty-four if a relative of the named insured, or under age twenty-one if in the care of an insured. Also under the ISO 2000 program, a resident of the named insured's household who is not a relative may be added by endorsement as an insured for both property and liability coverage.
Dwellings. The dwelling program provides separate definitions of insured in the property and liability coverage parts. Personal property coverage applies to property owned or used by the named insured, spouse (if a resident of the same household), or members of the named insured's and resident spouse's family residing with them (but only while the personal property is on the residence premises). Note that personal property coverage does not carry the homeowners policy extension to other persons under the age of twenty-one who are in the care of an insured (i.e., a foster child). Although property owned by a guest or servant can be covered at the named insured's request, a permanent resident of the household who is not part of the family in a technical sense may be without coverage.
Personal liability coverage under the dwelling program applies to the same categories of household residents as those under the ISO 1991 homeowners program (named insured, resident relatives, and other persons under the age of twenty-one in the care of any insured).
Personal automobile: The personal automobile policy (PAP) defines insured in the liability coverage section as the named insured, his or her spouse, if a resident of the same household (you and your), and any family member--defined as "a person related to you by blood, marriage or adoption who is a resident of your household"--including a ward or foster child. The current PAP adds that if a spouse ceases to reside in the same household during the policy period or prior to the inception, he or she will still be considered as you and your for coverage purposes until the earlier of: 1) the end of ninety days following the change of residence; 2) the effective date of another policy listing the spouse as named insured; or 3) the end of the policy period. In many places, the contract refers to the named insured (including resident spouse) and any "family member." These definitions are particularly important in connection with non-owned automobile coverage under liability, physical damage, medical payments, and uninsured motorists coverage.
Personal umbrella. Generally personal umbrella definitions are similar to those above. Although ISO and AAIS (American Association of Insurance Services) both have umbrella forms, for many years insurers drew up their own forms and continue their usage today.
Factors determining status of household members
Regardless of the specific language, the intent of these forms is to provide coverage to or limit coverage for members of the named insured's family or household under various conditions. The following cases illustrate the factors used by courts in the determination of whether a particular person is a resident or member of the same household -- in other words, the named insured's family -- at a particular time.
These factors include the individual's physical presence in, or absence from, the named insured's home during the period of time that included the date of the occurrence; the relationship of the individual to the named insured; the reasons for such person's presence in or absence from the named insured's home; the individual's living arrangements prior to the occurrence; and the individual's intention with regard to his or her permanent place of residence. These factual considerations become all the more important when a court finds that some or all of the respective policy language is ambiguous, since any ambiguity must be decided in the light most favorable to the insured.
Michigan law is representative of many states' reasoning when it comes to determining whether a person is a resident of an insured's household. The court weighs: 1) the subjective or declared intent of the person to remain in the household for some duration; 2) the formality of the relationship between the person and the members of the household; 3) whether they live in the same house or premises; and 4) whether the person has another place of lodging. Other factors may be considered: 1) What is the person's mailing address? 2) Does the person keep possessions at the insured's home? 3) What address appears on the person's driving license? 4) Is a separate sleeping place kept for the person? and 5) Is the person dependent financially upon the insured?
As noted, courts frequently look to the person's intent when making a determination. Intent may even be a somewhat ephemeral concept. In the case of State Farm Fire & Casualty Co. v. Estate of John Lazio, 822 F. Supp. 660 (N.D. Cal. 1993), John Lazio was 29 when he was killed in a motorcycle accident along with his passenger. At the time of the accident, he had slept for one night in a sleeping bag on his parents' living room floor, having asked them if he could live with them for a time. His possessions were in a storage unit. His stated intent was to build or buy a new house. The passenger's daughter sued, and coverage was sought under the umbrella policy of the parents, which covered the named insured's relatives if they were residents of the household.
The court found that even though temporary, Lazio's residency was indefinite. He had no other residence or address. Therefore, the umbrella policy provided coverage.
A case in which the court found the subjective intent of the parties was outweighed by the circumstances was Engerbretsen v. Engerbretsen, 675 A.2d 13 (Del. Sup. 1995). Arden A. Engerbretsen and his wife and two children moved in with his parents, the Arden B. Engerbretsens, in March. The intent was to stay while the son looked for a job but no later than the following November. Shortly before the move was to occur, one of the children was injured when the father accidentally ran over him with a riding mower. The wife sued the parents, but the insurer denied, citing the household exclusion. The court noted that the main disagreement among courts was "whether the subjective intentions of the occupier and the policyholder as to the transient or permanent nature of the stay should be considered." Although Arden A. argued that the intent was to leave and thus the stay was temporary, the court disagreed, saying that the circumstances -- a "close, extended family, living as members of a single household under one roof for a substantial period of time, sharing meals and vacationing together" -- outweighed the subjective intent, and therefore the household exclusion was upheld.
Intent also played a part in Fiore v. Excelsion Insurance, 276 A.D.2d 895 (N.Y. App. 2000), but with different results. Robert Roth was injured when he fell from his sister and her husband's roof while removing snow. He and his wife, having moved from Florida, were staying there while they looked for employment and housing in New York. The insurer denied coverage, citing the household exclusion. The court said that while the word residence was not defined, some degree of permanence and intention to remain was required rather than mere physical presence. In this situation, the household exclusion did not apply. (The Roths had spent two months with the Fiores at the time the accident occurred, and were in the process of obtaining new housing. The similarity to Engerbretsen demonstrates the necessity of reviewing all pertinent facts.)
But in the case of Pruitt v. Farmers Insurance Co., 950 S.W.2d 659 (Mo. App. 1997) the court took a different view of intent, saying that a person could never be held to be a resident in one place if at some distant point he or she intended to return to the place they considered their permanent home. Therefore, the trial court's finding of summary judgment in favor of the insurer was reversed and remanded to the trial court for further proceedings. The Missouri court also considered a distinction between domicile and residence, saying a person might have two residences, as a home in the city and another in the country, but domicile meant that the person intended to make that place a "fixed and permanent home."
Focusing on the declared intent of the individual, the court in United Services Automobile Association v. Mione, 528 P.2d 420 (Col. App. 1974), held the named insured's daughter was not a resident of the same household as her father at the time of her car accident. She was seeking coverage under the nonowned automobile provision of her father's automobile liability policy. The court rejected the argument that the term "resident of a household" was ambiguous as a matter of law insofar as it applied to a minor. The daughter, nineteen years old, was living at her fiancé's apartment on the date of the accident. The court referred to undisputed evidence that the daughter had departed from her parents' home following a family quarrel, and that when she left she gave her father, a member of the Armed Forces, her military identification card and the keys to the house. In addition, she only returned to the house for a brief visit and was married about a month after her departure.
Formality of the relationship
One criterion used in finding whether or not a person is a resident relative is that of formality; in other words, is the relationship one of intimacy or is it of a more formal nature? This was a considered factor in Amco Insurance Company v. Norton, 500 N.W.2d 542 (Neb. 1993). Here, the insured's niece moved into the insureds' home to babysit their two children over the summer. One day, while helping to put up a swing set, the niece was injured and sued the insureds. The insurer cited the household exclusion of coverage for an insured. But the court found that the insureds' niece was not a resident of the insured's household. In reaching this conclusion, the court said there was no intent to remain in the insured's household beyond the summer, there was no evidence of possessions other than some necessary clothing being kept at the insured's residence, and the niece received mail and phone messages at her parents' home. The court added that the niece's being paid "cast a shadow of formality" on the relationship. Therefore, the insureds had liability coverage for the injuries the niece received.
Living under the same roof
An important factor in determining a person's status as a resident relative is whether the person was living in the same house or dwelling as the insured at the time of the occurrence. While this is a significant factor in every case, it is not conclusive. Furthermore, as is illustrated by the following cases, courts construe policy provisions favoring coverage wherever reasonably possible.
It is not unusual for blood relatives to live together as a family, yet enjoy some degree of financial independence from each other. A common example is an employed adult son or daughter who pays his or her parents for board or room. Courts have long held that this arrangement does not break the bonds of a household. See, for example, Teems v. State Farm Mutual Automobile Insurance Co., 147 S.E.2d 20 (Ga. App. 1966) and Keene v. State Farm Mutual Automobile Insurance Co., 152 S.E.2d 577 (Ga. App. 1966). In the first case, the daughter was age eighteen and in the second the son was age forty, so age is not necessarily a consideration. The courts found in each case that daughter and son were household members.
Other cases have found it possible for relatives to live under one roof and not be members of the same household. In Buxton v. Allstate Insurance Co., 434 So. 2d 605 (La. App. 1983), the court held that there were two separate households where one sister rented an apartment in a two-family house owned and occupied by her sister and brother-in-law. The two apartments had their own kitchens and bathrooms and the two households did not share meals. The renter, who was 86 years old, fell on the steps leading up to the door, broke her hip, was hospitalized, and died a few days after returning home from a complication related to the injury. Several of her sisters, excluding the owner, recovered at trial from the owner's homeowners policy for the deceased's wrongful death on the theory that the steps were defective. The policy excluded coverage for bodily injury to an insured person (including a relative residing in the same household as the named insureds). The appeals court affirmed the trial court's decision, stating: "The pattern which emerges from the myriad of decisions considering the term 'household' seems to be an emphasis on dwelling as a family under one head. Here there existed two distinct families, dwelling apart. The testimony in the record discloses that all parties involved considered themselves as two independent family units."
But in a case involving a one-family house, where it might seem more likely that only one household was involved, the court nonetheless ruled there were two separate households. While a passenger in her daughter's car, the mother was killed by an uninsured motorist. Both the daughter's and the mother's policies paid uninsured motorist benefits, and the estate attempted to claim further benefits from the father's policy. Upon denial (based on the uninsured motorist exclusion of coverage while occupying any motor vehicle owned by a family member not insured by the policy), the case went to trial, where summary judgment was granted to the insurer. But the appeals court held differently. The mother and her teen-aged daughter lived on the second floor of the mother's and father's one-family house. Certain areas were shared in common, such as a bathroom, yet the court said "their households operated just as separately as if they occupied adjoining apartments in an apartment building, but shared a common area." This case is Estate of Sturgill v. United Services Automobile Association, 930 P.2d 945 (Wa. App. 1997).
In the ruling, the court looked with approval to State Farm Mutual Automobile Insurance Co. v. Snyder, 178 S.E.2d 215 (Ga. App. 1970). Here, Mrs. Snyder occupied two second floor rooms in a house belonging to her daughter and son-in-law, and shared the kitchen, bathroom, and laundry facilities with the rest of the family (but at separate times). She paid $15 a week as rent. The court found there were two domestic establishments. Thus, when the mother-in-law was injured while a passenger in a car belonging to the daughter and son-in-law, the exclusion for bodily injury to a "member of the family residing in the same household as the insured" did not serve to bar coverage.
Some jurisdictions hold that a person can maintain a household without living in it. One such is Erie Insurance Exchange v. Stephenson, 674 N.E. 2d 607 (Ind. Ct. App. 1996), in which a grandson moved into his grandmother's home when she moved in with a daughter because of poor health. The grandmother continued to own, insure, and pay taxes on the home, while the grandson paid utility bills. The grandson injured a friend at the grandmother's house. The court, in finding for coverage, said, "it is possible to maintain two households or to live as a member of one household and still be the 'domestic head' of a separate household."
Courts must often consider whether a resident relative may have more than one residence and, if so, what the implications are. In the case of National General Insurance Company v. Sherouse, 882 P.2d 1207 (Wash. App. 1994), a daughter was injured in a one-car accident in a vehicle driven by her mother. The mother's insurer paid policy limits, and the daughter brought action seeking underinsured motorist benefits under the same policy. The daughter and her children lived in a home owned by the mother, who paid the mortgage, some of the utility bills, and the phone bill. The mother visited the daughter monthly and spent the weekend. Therefore, the daughter argued she was a member of her mother's household and entitled to UIM benefits. But the court ruled that a person could be a resident of two households only if time was divided between the two on a regular basis, and the monthly visits did not make the daughter's house the mother's household. The court used much the same criteria as Michigan's, given above. There was no coverage under UIM.
A decision also turning on having more than one residence involved a mother who lived in a condo, a son who lived in a cabin owned by the mother, and a daughter who resided with the mother. The mother had three policies -- on the condo, a homeowners on the cabin, and an umbrella. The son suffered from mental illness, and believing he had been ordered to kill his mother, killed his sister when he found her at the condo. (He was found not guilty by reason of insanity.) The sister's estate brought suit against the brother, and the court had to determine if the policy on the cabin and the umbrella provided defense and indemnification.
The mother, knowing her son was mentally ill, had bought the cabin so he would have a place to live. He was emotionally and financially dependent upon her. The court said that Minnesota courts had not addressed whether a named insured might have two households, but they had stated that a person could live in more than one household. The court held that under the specific circumstances of this case the son was a member of his mother's household and an insured under the policies (homeowners and umbrella) covering the cabin.
The household exclusion of the policy on the cabin and the umbrella did not apply (no coverage was sought under the condo policy) because of the severability of insurance provision. The exclusion would only apply, said the court, if the sister and brother were living in the same household at the time of her death. Because they were not, there was coverage.
The exclusion for intentionally inflicted injury did not apply because case law had established that the conduct of a mentally ill person could be considered unexpected and unintended -- in other words, an accident.
Separation and divorce
A case involving a separated but not divorced couple serves to illustrate the courts' reluctance to exclude one spouse from coverage when members of the household still depend on each other for basic emotional and physical needs. One is the often-cited case of Mazzilli v. Accident & Casualty Insurance Co., 170 A.2d 800 (N. J. 1961). The couple was separated under a temporary court order for separate maintenance. The husband, the named insured under a comprehensive personal liability policy, continued to live in another building on the residence premises. A carpenter working on the premises was injured by the son, then ten years old, and a $10,000 judgment was rendered against the boy's mother -- but not against the named insured -- for her negligence in leaving a shotgun accessible to the child. The court found that the mother was an insured under the father's liability policy, noting that there is no absolute requirement in the law that members or residents of the household must live under a common roof. The court found that despite the separation there was a "substantially integrated family relationship."
A court also found that one household might exist for insurance purposes in the case of State Farm Mutual Automobile Insurance Co. v. Gazaway, 263 S.E.2d 693 (Ga. App. 1979). The husband claimed benefits for the death of his wife under the uninsured motorists coverage of his automobile policy. The couple had lived in separate trailers, fifteen miles apart, for about seven years. They had never divorced or taken any legal steps in declaring a separation. The children stayed with their mother during the week and with their father almost every weekend. The trailer used by the wife was titled in her husband's name, and he had helped her finance it and make payments on it. He paid weekly support to his wife, would often pay her utility and phone bills, and took care of the children's' medical expenses. They filed joint income tax returns each year. The husband's hospitalization insurance listed the wife. The trial court refused to rule for the insurer without a jury decision on the question of whether the wife was part of the husband's household and the court of appeals agreed, requiring that the issue be resolved by jury trial.
The appeals court said that a "common roof is not the controlling element." On the meaning of the word household the court quoted a previous Georgia case, saying: "[a] household has been defined as a 'domestic establishment under single management.'"
A Wisconsin case involved the status of a couple at the time of the wife's at-fault accident. The wife had commenced divorce proceedings and the husband voluntarily moved out, although he continued to visit the family home at least once a week. The auto policy was in the husband's name and insured his and his wife's car. Prior to the accident the difference in addresses was noted in the insurer's file with a question mark. The insurer denied coverage for the wife's liability, stating that at the time of the accident she was not a household resident.
The court viewed the divorce within the context of the state's family code, which provided a mandatory cooling-off period and an attempt to reconcile the parties. Therefore, the fact that the husband and wife lived at separate addresses was "not a factor to be given any great weight in determining whether such spouses remain members or residents of a single household." The court thus held that the wife was a resident of her husband's household. This case is Belling v. Harn, 221 N.W.2d 888 (Wis. 1974).
Another case taking public policy regarding divorce and the intent of the parties into account was Hawaiian Insurance and Guaranty Co., Ltd. v. Federated American Insurance, 534 P.2d 48 (Wa. App. 1975). Maria Smith and Michael Smith were separated because of marital problems when she was involved in a two-car accident. At the time of the accident, Maria was driving her father's uninsured car. The trial court held that Maria was not a resident of her husband's household for purposes of coverage under his automobile liability policy. The court reversed and found that Maria was covered.
When the couple first separated, Michael Smith moved into an apartment with his brother and Maria and the children lived at her parents' home for three weeks. She then moved into an apartment with her children and two other roommates. At the time of the accident there was no agreement to reconcile and live again as husband and wife. Both of them were working and fairly independent. A short time after the accident, the couple reconciled and lived together for about another year, after which they separated again and were divorced.
The court discussed other cases that had found no coverage for the departing spouse when the evidence showed the fixed intent never to return, drawing the conclusion that the basic question is whether the separation was intended to be permanent or whether the possibility of reconciliation was contemplated. The court noted that other court decisions had found the following factors to have a bearing on determining the spouses' intent: the living arrangements; behavior toward each other; whether they continued to see each other; and the continuation or cessation of financial obligations. The court said, "Also persuasive to the decisions has been the public policy in favor of continuing coverage to both spouses during the legal existence of the marriage." In this case, reconciliation was intended as a possibility at the time of the accident, and the couple did actually reconcile for some time after the accident, showing that the separation was on a trial basis when the accident occurred.
Note, though, as stated earlier in this discussion, the current PAP addresses coverage when a spouse ceases to be a resident of the same household. But in a situation such as Belling above, it is entirely possible that a court today would still see the estranged husband and wife as residents of the same household.
At times, the fact that the people involved did not live together at the time of the accident can be a factor favoring coverage. In State Farm Mutual Automobile Insurance Co. v. Johnson, 729 P.2d 945 (Ariz. App. 1986), the court found that an automobile policy exclusion of coverage for bodily injury to any family member residing in the same household as the named insured did not apply to a newlywed spouse who had not yet begun to live with her husband.
The couple had just been married and had spent one night together in a motel when the vehicle in which they were driving overturned, killing the husband and injuring the wife. They were returning home in a friend's van, and the friend was with them when the accident occurred, but the husband was driving. The van owner's policy excluded coverage for bodily injury to any insured other than the named insured, including any "family member of an insured residing in the same household as the insured." The husband was an insured at the time of the accident because he was using the van with the owner's consent.
The wife sued her husband's estate for the injuries she suffered, won a judgment of $225,000, and made a claim against the van owner's insurer. Both the insurer and the wife filed for a determination of whether the exclusion barred her recovery. The trial court and the court of appeals found that the exclusion did not apply.
State Farm argued that it was unnecessary for the wife to have lived with her husband in order for her claim to be excluded, contending that the mere fact of marriage and an intimate relationship, with the intent to reside together in the future, was sufficient. The court noted the purpose of the exclusion as being to protect the insurer against the natural partiality of the insured to a claim by a family member, but said that the insurer was ignoring the words limiting the scope of the exclusion, i.e., "residing in the same household as the insured." In this case, the couple had never lived together and would not be able to do so for at least a week after their return to their hometown.
This court found that the term "'household' "is consistently defined to include the element of living together under the same roof" and further that reside was defined in Webster's dictionary as "to dwell permanently or continuously: have a settled abode for a time." The court was unconvinced by cases showing that living under one roof is not the only requirement for determining the existence of a household, since none of those cases dealt with a situation where the spouses had never lived together.
A homeowners case in which the separated husband committed arson was the subject of Plymouth Farmers Mutual Ins. Association v. Armour, 584 N.W.2d 289 (Ia. 1998). The home was in the wife's name and the husband shown as an additional insured. The wife filed for divorce and got a restraining order against the husband, citing physical abuse. She also requested his name be removed as additional insured. The husband began living in a camper on his mother's property. At the time of the fire, the divorce was not final. The insurer denied coverage, citing the exclusion for an act of an insured with the intent of causing a loss. The court viewed many of the factors previously discussed: the two were not under the same roof; the duration of the separation was substantial; there was no longer an intimate relationship between the two; and the husband's name had been removed as additional insured. The court found for coverage for the wife's loss, in large part because the court did not believe the testimony of the arsonist husband (by then in jail), that the wife's purchase of the house some years before had actually been an attempt to defraud his first wife. There was no evidence to support this, and so the court found the husband was not an insured at the time of the loss.
Children of divorce
When spouses divorce, the circumstances regarding children are often tangled. Separation does not definitively sever the household relationship of the couple, nor does divorce necessarily end the household relationship of the parents and children. Some cases illustrating this point have already been discussed, but others merit attention here.
In Countryside Casualty Co. v. McCormick, 722 S.W.2d 655 (Mo. App. 1987), the court ruled that a child killed in a car accident had been a resident of two households, her mother's and her father's. The parents were divorced and custody was given to the mother, but the evidence showed that their daughter spent as much time with her father as with her mother, had a bedroom at her father's house, and kept permanent clothing there. The father faithfully paid his child support. The child was killed while a passenger in an uninsured car driven by her mother's second husband.
The father, as a result of his daughter's death, claimed uninsured motorists coverage benefits under his automobile policy. The insurer denied coverage on the basis that the daughter was not an insured, since she was not residing in the named insured's household at the time of the accident.
The court of appeals affirmed the trial court's finding that the daughter had been a resident of her father's household at the time of the accident, concluding that the policy did not require that the father's residence be the daughter's sole residence, or even her principal residence, or her residence most of the time. The court quoted this passage from Widiss, Uninsured and Underinsured Motorist Insurance, Second Ed., Vol. 1, sec. 4.13 as support for its conclusion: "When a separation is clearly permanent, the courts almost always examine the circumstances with a view to evaluating whether the nature of the relationship between the injured child and the non-resident parent at the time of the accident justifies an extension of coverage. The most significant factor in determining the residence of the child is a judicial determination awarding custody. Even when custody has been awarded, however, a child may still be deemed an insured under the other parent's insurance if the insured parent can show either (1) that there are periods of residence with both parents or (2) that the non-resident parent provides substantial support of the child and the home where the child resides. Evidence of either of these factors may be sufficient to warrant the determination that a child continues to be a resident of the insured parent's household."
A similar decision was reached in Miller v. United States Fidelity and Guaranty Co., 316 A.2d 51 (N. J. Supp. Ct. 1974). A nine-year-old son was visiting his noncustodial father, which he did every weekend. One of his chores at his father's house was to burn the trash. A fire started that extensively damaged a neighbor's barn and the neighbor sued. The child's parents had divorced and remarried, but lived only about one-half mile apart. The son slept over at his father's home when he visited. When he was asked who he lived with he answered, "My dad and my mom."
The court did not agree with the insurer that the controlling factor for determining residency is the decree of custody, holding that since there was no material question of fact, in that a person could have more than one residence, judgment in favor of coverage under the father's policy was appropriate.
One court noted that the intent of the child's parents, and not the intent of the child, was the basis for determination. However, in the case of joint custody, the parents gave the right to establish residence to the court, and therefore residence was with both parents as a matter of law. Despite policy language requiring "the physical presence in your household with the intention to continue living there," the court found that a daughter injured in a car accident was provided underinsured motorist coverage by her father's policy even though at the time she was residing with her mother. See Carbon v. Allstate Insurance Company, 701 So. 2d 462 (La. App. 1997).
However, where a distant relationship exists between the divorced parent and the child, courts usually find that the child is not a resident of the parent's household. Such was the case in Kemp v. State Farm Fire and Casualty Co., 442 So. 2d 642 (La. App. 1983). Two young men, both 21 years old, were trying to light a butane gas burner in order to boil crabs when they were both burned. As a result of his injuries, Richard Kemp III sued his friend, Joseph Bonck, Jr. and Joseph's father, Dr. Bonck. Dr. Bonck owned the camp where the accident occurred but was not present. Dr. Bonck was insured under a homeowners liability policy, and the question of coverage for his son under the same policy was raised. The trial court ruled that the son was not a resident of his father's household, and the appeals court affirmed the decision.
The evidence showed that Joseph Bonck, Jr.'s parents had been separated about 10 years and divorced for more than eight. Custody was awarded to his mother, with whom he lived while attending the university. He rarely saw his father and could recall spending a night at his house only once in the last five years. He kept no clothes or possessions at his father's home. Thus, he was not covered under his father's liability coverage.
College -- Job training -- Armed services
Children, whether minors or adults, who are away from the family home because of service in the armed forces or for college or job training courses are generally found to be residents or members of their parents' households. However, resident status is not conferred if the evidence strongly indicates that the child and parents no longer consider themselves to be one household.
Coverage was found, in Aetna Casualty & Surety Co. v. Means, 382 F.2d 26 (10th Cir. 1967), for a married son at college living in his own apartment, since the apartment was a temporary living place and the couple had no permanent address except that of the named insured. The son was driving in his hometown when he had an accident in which the occupants of the other car were injured. He was insured by Aetna and Aetna defended against the injured parties' claims. Judgments were entered for some of the injured, and were likely to be entered for others. The amount of the judgments would exceed the policy limits. The injured parties then claimed that the son was a resident of his father's household for purposes of coverage under his father's Aetna policy.
Aetna brought an action seeking freedom from liability under the father's policy. After a jury trial, it was held that the son was a resident of the father's household. The federal appeals court, applying Oklahoma law, affirmed the lower court's decision.
There was evidence to support a finding either way, but the appeals court found that there was sufficient evidence to uphold the jury's verdict. At the time of the accident, the son and his wife lived in an apartment at Oklahoma State University. During the previous summer, he had lived with his wife's parents. After the accident he attended school in Kansas and lived in an apartment there. He owned his own car. His father's policy stated that there was no male operator under twenty-five years of age in the named insured's household. Both the father and the son testified that he was not resident of the household at the time of the accident.
Despite the testimony of the father and son that they were not part of the same household, the jury found evidence to the contrary persuasive. The son was a minor. He always gave his father's address as his home address. His wife registered a car she bought with her in-law's address. The son had a room at his parents' house and kept clothes there. The father gave the son $150 a month as support. The son testified that the apartments were only temporary living places. With these facts in mind, the appeals court said, "So, we think, a married son might be a member of his father's household and at the same time be the head of his own household." This case is somewhat unusual in that the court paid little attention to the testimony of the father and son concerning their intention to be considered as separate households. From this it can be surmised that the court was primarily concerned about adequate recovery for those injured in the accident, so long as there was reasonable support for its conclusion.
Another case, similar in many respects to the Means case but not involving a married son, is Federated American Insurance Co. v. Childers, 608 P.2d 584 (Or. Ct. App. 1980). Just as in the Means case, the fact that the father had not listed the son as a resident of his household because he feared it would increase his premiums did not have a bearing on the finding of resident relative status. One important difference between the cases is that the son in this case considered his parents' home to be his own.
In the case of Midwestern Indemnity Co. v. Craig, 665 N.E.2d 712 (Oh. Ct. App. 1995), UM/UIM would not be available if the student away at school was not an insured, which the insurer argued. But because the student had a room in the family home to which he returned on various weekends and during college recess, and because he was dependent on his mother for financial support, the court found he was a household resident and therefore insured.
But under very similar circumstances the court in Quincy Mutual Fire Insurance Co. v. Clyman, 910 F. Supp. 230 (E. D. Penn. 1996) found that a son away at school was not a resident of the named insured's household, because some ten months of the year were spent elsewhere. Therefore, there was coverage when the son sued his parents for their negligence in leaving a dog toy on the steps, over which he fell.
The absence of a child from home because of job training does not necessarily sever his or her membership in the family household. The state supreme court upheld a lower court's decision that a daughter, living in another city while undergoing training with an airline, was properly considered a resident of her father's household and, therefore, still an insured under his family automobile policy. The case, Goodsell v. State Automobile Casualty Underwriters, 153 N.W.2d 458 (Ia. 1967), involved collision damage to a car owned by the daughter but declared in the father's policy, and medical payments recovery for the daughter. The insurer based its denial on the fact that the girl did not qualify as an insured under the policy since she was living away from home when the accident occurred.
It was brought out in the trial that during the course of her training she had lived in two separate cities, there was the possibility that she would be transferred to still more cities before her training was finished, and there were also the possibilities that she would not be hired at the end of the training period or that she might refuse a job offer. The trial court found, and the supreme court concurred, that these facts supported the young woman's contention that she had not changed her residence, and that she went into training with no idea of the ultimate outcome.
Along the same lines, the state supreme court in American States Insurance Co. v. Walker, 486 P.2d 1042 (Utah 1971), held that at the time of an automobile collision involving the named insured's daughter, the daughter was a resident of her father's household even though her father's home was in Idaho and she was living in Utah while undergoing training as an X-ray technician. The court pointed out that residence is a matter of choice and intent and all of the daughter's acts while she was away training, except her income tax returns, pointed to an attachment to and membership in her father's household.
As already seen from cases discussed earlier in this article, service in the armed forces can also be considered merely a temporary absence of the child from the family home. A case in point is Wood v. Mutual Service Casualty Insurance Co., 415 N.W.2d 748 (Minn. App. 1987), in which the court upheld the trial court's finding of coverage for bodily injury to a son in the army under the parents' automobile coverage. Steven Wood was on leave and riding home with his sister's uninsured boyfriend. The car was involved in an accident, and Steven was injured. He claimed uninsured motorist coverage under his parents' policy.
The court concluded that the following factors must be considered in determining whether an absence from the parental home could be considered merely temporary: (1) the age of the person; (2) whether a separate residence had been established; (3) the person's self-sufficiency; (4) the frequency and duration of visits in the family home; and (5) the intent to return. The court said that leaving belongings in the home and use of the parents' address could be considered, but are not dispositive.
With these factors in mind, the court of appeals found sufficient evidence to uphold the lower court's decision. Steven used his parents' address as his official address, had left most of his personal belongings at home, did not own a car, sent most of his pay home and asked his parents for money when he needed it. He never established a separate residence, and was uncertain whether he would continue in the army or return to the family business. Both he and his parents testified that they considered the parents' home to be Steven's permanent home. The Wood's insurance agent testified that when Steven went into the service, his parents requested that he be removed as a named driver and their premiums were reduced, but Steven's mother testified that she specifically asked if he would be covered when home on leave and the agent assured her that he would be.
And the court in the case of Donegal Mutual Ins. Co. v. McConnell, 562 So. 2d 201 (Ala. 1990) distinguished between residence and domicile, and found that a person might have more than one residence, as a child away in the armed services, but was still a resident of the insured's household, that being his domicile -- the fixed place to which he would return. Pennsylvania insurance law held that "a child living apart from the named insured while serving in the armed forces is nevertheless a resident of the insured's household within the meaning of an insurance policy."
Even when it might appear to be questionable, courts may hold for coverage. In the case of Prudential Property and Casualty Insurance Co. v. Koby, 705 N.E.2d 748 (Oh. Ct. App. 1997), the emancipated son was a career officer residing in Texas when he negligently fired a gun at his parents' home and injured someone. The court applied the dual residency rule, and also found that the son spent much time at his parents' home, had an Ohio driver's license, voted in Ohio, and used the Ohio address as his income tax address. Therefore, the parents' homeowners insurer had to provide defense and indemnification.
Guests or temporary residents
When it can be shown that the relative in the insured's home is either a guest or staying there temporarily, resident relative status is generally not conferred by the courts.
An interesting case involved an insured husband and wife and the husband's sister, a visitor from Germany. The Michigan homeowners rented a trailer and met the sister in New York City, intending to travel around New England and Canada. They lived in the trailer in New York for a few days. Then the husband unhitched the trailer and the three drove to a different location to see a play. When they returned to the car, they found it had been broken into and the sister's suitcase and some other belongings had been stolen.
After traveling, the three returned to Michigan and presented a claim to the homeowners insurer. The insured stated his sister was a resident relative. The court reviewed such things as the duration of the visit, the sister's intent to return to Germany, and the fact she had a separate residence there, and found no coverage. The court added that the insured did not use the property himself, and even though he could request the insurer to cover a guest's property, that request was only valid while the suitcase was in a residence occupied by an insured. Because the property was stolen from an auto, there was no coverage. This case is Stadelmann v. Glen Falls Ins. Co., 147 N.W. 2d 460 (Mich. Ct. App. 1967).
The court in Pamperin v. Milwaukee Mutual Insurance Co., 197 N.W.2d 783 (Wis. 1972) emphasized the temporary nature of the living arrangements in determining that a young girl was not a resident of her uncle's household. Ten days after moving into her uncle's home in order to help out during the hospitalization of one of his children, the girl was involved in an automobile collision while driving her mother's car. The uncle's insurer denied non-owned automobile coverage asserting that the girl was not a resident of the uncle's household. The trial court decided the issue to the contrary. In reversing the trial court's decision, the supreme court held that the girl's stay was not likely to have been substantial. Apparently, the circumstances surrounding the illness of the uncle's child combined to show that the young girl's stay would be temporary only.
See, as well, the Amco case discussed earlier under the heading Formality of the Relationship.
Similarly, an Oregon court found that the insured's grandson was not a member of the family who lived "in the same mobile home" for purposes of liability coverage in Lang v. Foremost Insurance Co., 778 P.2d 510 (Or. App. 1989). The insured's daughter, her husband, and their children came to live with the insureds until the daughter's husband found work, something they had done several times in the past. The last time they had shared a dwelling was five years earlier, for about six weeks. The daughter's family arrived with all their possessions in a U-Haul trailer. When they arrived this time, they unloaded their belongings into the garage. While the father and grandparents were returning the trailer, one of the grandchildren started a fire that destroyed the mobilehome and seriously harmed neighboring property. After the fire, the families lived together for about three weeks until the father found work. They never unpacked their belongings while they were in the garage, except for some clothing.
The neighbors sought a determination of insurance coverage for the grandson under his grandparents' coverage. The trial court found no coverage and the court of appeals affirmed. The appeals court said: "The relevant factors to be considered in determining whether persons are members of the same household include whether they live under one roof, the length of time they have lived there, whether the residence is intended to be permanent or temporary and whether they are financially dependent on one another." The court found that even though the grandson's stay was to be of an indefinite length, it was not to be permanent and that the daughter's family were only financially dependent until the husband found work; further, the court found that the evidence showed that the two groups were separate family units.
Nor can relatives who are guests look to their hosts' insurance for coverage, as illustrated by Puente v. Arroyo, 366 So. 2d 857 (Fla. App. 1979). The court found that a niece, visiting for no more than a month, was not a resident of the insureds' household for insurance purposes. The Cossios had their 9-year-old niece visiting from Puerto Rico. She stayed with them for two weeks, then stayed with other relatives in the area before returning to Puerto Rico. A bike that the niece was riding collided with one ridden by another girl, and a claim for bodily injury was brought against her. The court found that "no significant connection" existed between the niece and the household in question, and that no coverage was afforded. Quoting from other Florida cases, the court said: "The resident is more than a mere visitor or transient, but lives at a place with additional attachments of such significance as to render that person a more or less consistent part of the community."
A California court in Vanguard Insurance Co. v. Hartford Insurance Co., 88 Cal. Rptr. 628 (Ca. Ct. App. 1970) held that a thirteen year-old boy who was a weekend guest at the home of the named insured was not a resident of the named insured's household. The insured's homeowners policy extended liability coverage to persons under twenty-one years of age if residents of the household and if under the care of the named insured or certain other individuals named in the policy.
In upholding the trial court's decision, the appellate court stated that the unambiguous definition of insured required "any other person under the age of twenty-one in the care of the insured" to also be "resident" of the insured's "household." After expressing the view that residence connotes any place of abode of some permanency, as opposed to a temporary sojourn, the court concluded that the boy was not covered under the homeowner's policy.
A minor who resided with her mother and her mother's companion of many years was not an insured person under the companion's auto policy for underinsured motorist coverage purposes. The girl was injured while riding in a car with a friend. She collected under the friend's auto policy, and then sought underinsured motorist coverage under her mother's companion's policy. The trial court concluded that the girl was a foster child because of the long-term, close relationship between the girl and man. The term "foster child" was not defined in the auto policy. But the appellate court looked to state code, which defined "foster care services" as a "provision of casework, treatment, and community services..." where a child may be placed in another home but legal custody remained with the parents or guardians. Since the girl did not have this kind of relationship with her mother's friend, she was not a relative and therefore there was no coverage. This case is Virginia Farm Bureau Mutual Insurance Co. v. Gile, 524 S.E.2d 642, (Vir. 2000).
As illustrated by the cases presented here, courts tend to a liberal interpretation in favor of coverage and to the importance of the intent of the parties at the time of the loss. In fact, the controlling point frequently seems to be just how the intent, under the circumstances, looked to the court. This makes predicting the outcome of any case hazardous.
A problem in attempting to judge a specific situation is the fact that the intent of a person can change, perhaps gradually. A son in the armed services as a draftee or on a temporary tour of duty may decide to make a career out of the service. A son or daughter working elsewhere on what started as a temporary job may wind up by staying there permanently. In many cases, it is impossible to draw a line -- which means that no one can provide an answer in advance.
Frequently, where a member of a family is living elsewhere or autonomously on the premises, separate insurance is desirable for many reasons, and may save much aggravation and possibly avoid a costly lawsuit.
*For further information, or to contact this author, please leave a comment and your e-mail address in the forum below.