Home Sweet Home: Kansas Federal Court Finds Homeowner's Policy Coverage Subject to Residency Requirements

In Sina Davani v. Travelers Personal Insurance Company and Geico Insurance Agency, LLC, the United States Court for the District of Kansas granted summary judgment in favor of the defendant-insurer. The court’s decision was grounded in its interpretation of the homeowner’s policy, which extended coverage solely to the designated “residence premises.”  Considering the language of the insurance policy, the court found that the plaintiff-insured, who conceded that he had never resided at the insured premises, was obligated to maintain residence for coverage to apply.  This, in turn, formed the basis for the court’s decision.

After submitting a claim to his insurance company for property damage caused by a water leak, the insured filed a breach of contract claim against the insurer.  He argued that the insurance company breached its obligation under the terms of the insurance policy, which required the insurer to conduct a reasonable investigation and promptly pay the insured’s claim.  In response, the insurer pointed to the terms of the insurance policy, stating that coverage was explicitly limited to “residence premises,” defined within the policy as “[t]he one family dwelling or unit where you reside.”  The insurer moved for summary judgment under the terms of the insurance policy, asserting that there was no breach of the insurance policy because – as a matter of law – the policy did not cover the insured’s claim.

The district court observed that while the insured acknowledged that he did not presently live at the property, the issue was whether the term “residence premises” was sufficiently clear to exclude coverage for “a vacant property.”  Applying the principles of Kansas law governing the interpretation of insurance contracts, the court turned to the policy’s express terms and held that the term “residence premises,” as included and defined in the insurance policy, bore no ambiguity.  In so holding, the court drew upon the ordinary meaning of the term “residence” as a “building used as a home,” concluding that this dismissed any potential confusion on the scope of coverage in this case.

Construing the term “residence premises” to mean property where the insured actually lives, the court determined that the insurance policy required not only the insured’s physical presence on the property but also an accompanying intent to remain there for coverage to apply.  The court therefore granted summary judgment in favor of the insurer because it was undisputed that the insured never “resided” at the insured premises.

Implications

This decision provides guidance to the insured and insurer alike.  For the insured, this decision demonstrates the implications that may arise when a homeowner’s policy lacks language aligning with insured’s intended use of the insured property.  For the insurer, this opinion illustrates the importance of drafting policies with clear, well-defined, and unambiguous language that safeguards against future failure-to-pay claims and other risks associated with litigation.  Baker Sterchi attorneys will continue to monitor this litigation.