Insured Must Reside at Premises at Time of Loss
Post 4860
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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.
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Notice of Claim Later than 60 Days After Expiration is Too Late
Post 5089
Injury at Massage Causes Suit Against Therapist
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Hiscox Insurance Company (“Hiscox”) moved the USDC to Dismiss a suit for failure to state a claim because the insured reported its claim more than 60 days after expiration of the policy.
In Mluxe Williamsburg, LLC v. Hiscox Insurance Company, Inc., et al., No. 4:25-cv-00002, United States District Court, E.D. Missouri, Eastern Division (May 22, 2025) the trial court’s judgment was affirmed.
FACTUAL BACKGROUND
Plaintiff, the operator of a massage spa franchise, entered into a commercial insurance agreement with Hiscox that provided liability insurance coverage from July 25, 2019, to July 25, 2020. On or about June 03, 2019, a customer alleged that one of Plaintiff’s employees engaged in tortious ...
ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Posted on June 2, 2025 by Barry Zalma
Post 5087
See the full video at and at
Read the full article and the full issue of ZIFL June 1, 2025 at https://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-06-01-2025.pdf
Zalma’s Insurance Fraud Letter – June 1, 2025
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ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Read the full article and the full issue of ZIFL June 1, 2025 at https://lnkd.in/gTWZUnnF
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at ...
No Coverage if Home Vacant for More Than 60 Days
Failure to Respond To Counterclaim is an Admission of All Allegations
Post 5085
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In Nationwide Mutual Insurance Company v. Rebecca Massey, Civil Action No. 2:25-cv-00124, United States District Court, S.D. West Virginia, Charleston Division (May 22, 2025) Defendant Nationwide Mutual Insurance Company's (“Nationwide”) motion for Default Judgment against Plaintiff Rebecca Massey (“Plaintiff”) for failure to respond to a counterclaim and because the claim was excluded by the policy.
BACKGROUND
On February 26, 2022, Plaintiff's home was destroyed by a fire. At the time of this accident, Plaintiff had a home insurance policy with Nationwide. Plaintiff reported the fire loss to Nationwide, which refused to pay for the damages under the policy because the home had been vacant for more than 60 days.
Plaintiff filed suit ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...