Homeowners Policy Requires Insured to Reside at Premises

Barry Zalma
Jul 11, 2023

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Shanice Currie had a homeowners insurance policy with State Auto Property & Casualty Insurance Company (State Auto). After two fires severely damaged her duplex in Milwaukee, Currie sought payment from State Auto. State Auto denied the request for coverage, claiming that the duplex was not a “residence,” and therefore was not covered by the policy. Currie sued State Auto. The district court granted summary judgment to State Auto.

In Shanice Currie v. State Auto Property & Casualty Insurance Company, No. 22-2517, United States Court of Appeals, Seventh Circuit (July 5, 2023) the USCA for the Seventh Circuit explained the meaning of the terms “residence premises” and “reside.”

BACKGROUND

Currie purchased the previously abandoned duplex (the Property) from the City of Milwaukee in the spring of 2018. She proceeded to install electricity and fill the bedroom with a dresser, mirror, clothing, and a bed. Yet, at the time she acquired the policy the property had no running water, kitchen appliances, no chairs or sofas in the living room, or a front door. Where a door should be, there was a wooden board that Currie would have to unscrew to enter the Property. Strangers came and went, and Currie took no action to eject them.

Apart from sleeping at the Property two or three nights per month, Currie did not stay there. She bathed, prepared meals, kept personal belongings, and received mail at her two other addresses in Milwaukee.

THE POLICY

The homeowners policy Currie purchased from State Auto for the Property covered “residence premises,” which the policy defined as: “The two-, three-, or four-family dwelling where you reside in at least one of the family units . . . on the inception date of the policy period shown in the Declarations and which is shown as the ‘residence premises’ in the Declarations.

Because the policy’s inception date was September 15, 2018, Currie needed to reside in one of the units on the Property on that date for coverage to attach. She did not.

THE FIRES

On October 31 and on November 2, 2018, fires broke out at the Property, causing extensive damage. Currie informed State Auto that the Property was a total loss and sought full replacement value. State Auto denied Currie’s claim, explaining that the Property was never her residence.

DISCUSSION

Currie sued. The district court granted State Auto’s motion for summary judgment. The court held that, while the operative clause in the policy-“the dwelling where you reside”-was ambiguous, “[a] reasonable person would, nevertheless, understand the clause to require plaintiff to maintain and use the [Property] as a home, even if it was only one residence among many.” Given Currie’s lack of legal and practical ties to the Property, the district court found that a jury could not reasonably conclude that Currie resided there.

There is no statutory definition of “residence” or “dwelling” in Wisconsin with respect to homeowners insurance coverage. Because neither “occupied” nor “dwelling” are technical terms, an appellate court may ascertain their meanings by reference to recognized dictionaries. Because Currie did not use the Property as a home the court found that no reasonable jury could conclude that she resided there.

The Seventh Circuit concluded that the district court correctly concluded that Currie did not “actually live” at the Property, on the inception date or at any other time, thus it was not her residence. The address was not listed on her driver’s license and her mail was sent to a different location. Most telling, the Property was not secure. It had no door nor facilities to support normal life.

As a matter of law, Currie’s Property was not a residence on the policy’s inception date nor any time before or after. It was not covered by the insurance policy, and the district court’s grant of summary judgment to State Auto was proper.

ZALMA OPINION

Insurers will issue fire insurance on vacant property but will not do so on a homeowners policy form. To protect the insurer the homeowners policy requires the insured to reside on the property. Since the property was not sufficiently equipped for a person to reside in because it had no door, no water and no other facilities to support normal life, Currie failed to fulfill the basic requirement for coverage: residence. Had the insurer been told the truth about the condition of the property it would never have agreed to the coverage. Because of the residence condition there was no need for the insurer to accuse the insured of fraud although she probably obtained the coverage by fraud.
(c) 2023 Barry Zalma & ClaimSchool, Inc.

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