Insured Must Reside at Premises at Time of Loss
Post 4860
Read the full article at https://lnkd.in/gYgSrXP2, see the full video at https://lnkd.in/gqp9Wqxk and at https://lnkd.in/gSi8m6-J and at https://zalma.com/blog plus more than 4850 posts.
Perla Olave owned a house in Thornton, Colorado, that was insured by American Family Mutual Insurance Company, S.I. In late 2017, Ms. Olave began spending a majority of her time in Missouri, and starting in March 2018, she allowed the family of her brother, Jamie Darci Olave-Hernandez, to live in the Thornton house. In September 2020, the house was damaged by fire. Ms. Olave had last stayed there in December 2019, and she had not spent a day in Colorado in 2020.
In Perla Olave; Jamie Darci Olave-Hernandez v. American Family Mutual Insurance Company, S.I., No. 23-1337, United States Court of Appeals, Tenth Circuit (August 15, 2024) the Tenth Circuit resolved the dispute over the meaning of the term “reside.”
BACKGROUND
American Family denied Ms. Olave’s and Mr. Olave-Hernandez’s claims under the insurance policy on the ground that Ms. Olave did not reside in the Thornton house at the time of the fire and had not complied with the policy’s requirement to notify American Family of her change in residence.
Ms. Olave and Mr. Olave-Hernandez (collectively, the Appellants) sued American Family and the district court granted summary judgment to American Family.
The Policy.
In December 2016, Ms. Olave represented in her application that she and her child would be the only residents of the Property, it would be her primary residence, and it would be owner-occupied. American Family renewed the policy in December 2019 (the Policy). The Policy’s Declarations identified Ms. Olave as the named insured and the Property as a “Primary Residence”.
Change in Occupancy.
In January 2018, she enrolled her child in school in Missouri and obtained a business license there. At that point, the Property was vacant. When the Policy was up for renewal in December 2019, Ms. Olave told her insurance agent that her mailing address had changed to Missouri, but that she was still living at the Property and was going back and forth to Missouri for work.
The Claim and Investigation.
The Property was damaged in an electrical fire on September 15, 2020. Ms. Olave was in Missouri.
The last time she had stayed at the Property was some weeks in December 2019; the time before that was in August 2019. But due to the COVID-19 pandemic, she had not spent a single day in Colorado in 2020. She also stated she had a Missouri driver’s license, and her Colorado driver’s license had expired in 2018.
American Family Denied Coverage.
In January 2021, American Family denied coverage because:
1 Ms. Olave’s Colorado vehicle registration for a 2018 Jeep Grand Cherokee expired in 2018;
2 Social media posts by Ms. Olave since 2018 were from Missouri;
3 Ms. Olave was the owner of Frida Microblading Studio located in [the city of] Town and Country Missouri and Ms. Olave maintains her tattoo license with the State of Missouri;
4 A blog focused on Ms. Olave’s business states that Ms. Olave “move[d] to the St. Louis area . . . to ensure that her daughter grew up around extended family;” and
5 Most notable, Ms. Olave registered to vote in Missouri beginning on 2/01/2018 and continuing through the date of loss.
Ms. Olave’s residency at the Property the District Court identified four relevant factors:
1 the subjective or declared intent of the individual,
2 the formality or informality of the relationship between the individual and members of the household,
3 the existence of another place of lodging, and
4 the relative permanence or transient nature of the individual’s residence in the household.
The District Court held that Ms. Olave breached her obligation under the Policy to notify American Family of her change of residence within 30 days.
The District Court granted summary judgment to American Family on the bad faith and statutory delay/denial claims.
DISCUSSION
Under Colorado law, residence denotes a place where a person dwells. It simply requires bodily presence as an inhabitant in a given place. Ms. Olave’s focus on her intent, without regard to her physical presence, is not a reasonable interpretation of “reside” under Colorado law.
The Court Did Not Err In Holding The Misrepresentations Were Material.
A misrepresentation will be considered material if a reasonable insurance company, in determining its course of action, would attach importance to the fact misrepresented.
No reasonable juror could conclude that an insurance company would not attach importance to the alleged reason for Ms. Olave’s travel where the Policy specifies a “work related travel” exception to the requirement to report the Property as “uninhabited” and no reasonable juror could conclude that an insurance company would not attach importance to a statement of ownership of items at the Property in determining whether Ms. Olave truly resided at the Property, as she claimed.
ZALMA OPINION
A homeowners policy is a contract of personal indemnity that requires the person who is the subject of the insurance actually live in the property that is the subject of the insurance. Ms. Olave did not live at the Colorado house and lied to the insurer when she renewed the policy that she lived there as her primary residence. It burned when someone else lived there and she resided in Missouri not Colorado.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to my substack at https://barryzalma.substack.com/subscribe or subscribe to my substack at https://lnkd.in/gmmzUVBy
Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg
Go to the Insurance Claims Library – https://lnkd.in/gwEYk
The Professional Claims Handler
Post 5218
Read the full article at https://www.linkedin.com/pulse/zalma-philosophy-claims-handling-part-8-barry-zalma-esq-cfe-zdwsc, see the full video at https://rumble.com/v70zl4s-the-zalma-philosophy-of-claims-handling-part-8.html and at https://youtu.be/MIYcF71ffRQ, and at https://zalma.com/blog plus more than 5200 posts.
Claims Commandment X – Thou Shall Not Pretend to be a Lawyer
Some experienced and professional claims people know the law in their area of expertise better than most lawyers.
Adjusters should be adjusters and leave lawyering to lawyers. Similarly, lawyers should be lawyers and never try to be adjusters.
Claims Commandment XI – Thou Shall Empathize With the Claimant
Everyone presenting a claim is unhappy, disturbed, shocked, injured and needs help.
Empathy is identification with and understanding of another’s situation, feelings, and motives. It is the ability to understand another person’s circumstances, point of view, thoughts, and feelings....
HOW TO CREATE AN EXCELLENCE IN CLAIMS HANDLING PROGRAM
See the full video at https://rumble.com/v70wb2i-the-zalma-philosophy-of-claims-handling-part-6.html and at https://youtu.be/tL5nDKPEs40 and at https://zalma.com/blog plus more than 5200 posts.
Post 5217
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry.
An Excellence in Claims Handling program begins with a statement in the insurer’s claims manual or statement of professionalism that it is dedicated to providing excellence in claims handling to every insured who presents a claim.
The excellence in claims handling program should include, at a minimum:
A series of lectures supported by text materials explaining:
A definition of insurance.
How to read and understand an insurance policy.
How to interview an insured, witness, or claimant.
How to assist an insured in the insured’s obligation to ...
The Professional Claims Handler
Post 5216
Read the full article at https://www.linkedin.com/pulse/zalma-philosophy-claims-handling-part-5-barry-zalma-esq-cfe-jde8c, see the full video at https://rumble.com/v70q4x8-the-zalma-philosophy-of-claims-handling-part-5.html and at https://youtu.be/6b9tZQsEkB4, and at https://zalma.com/blog plus more than 5200 posts.
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry.
Standards to be a Professional Claims Adjuster
The Insurance claims professional should be a person who:
1. Can read and understand the insurance policies issued by the insurer.
2. Understands the promises made by the policy.
3. Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
4. Are competent investigators.
5. Have empathy and recognize the difference between empathy and sympathy.
6. ...
The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
