Oregon Concludes Requirement that Insured Occupy Residence Premises Only Applies to Inception of Policy
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Post 5040
Ambiguity Makes Condition Unenforceable
In John Durkheimer and Karen Durkheimer v. Safeco Insurance Company Of Illinois, No. 3:24-cv-1333-SB, United States District Court, D. Oregon (April 1, 2025)
John and Karen Durkheimer (“Durkheimers”) sued Safeco Insurance Company of Illinois (“Safeco”), alleging claims for breach of insurance contract, breach of the implied covenant of good faith and fair dealing, and negligence per se. The Durkheimers’ residence in southwest Portland suffered significant water damage due to burst water pipes. The Durkheimers submitted an insurance claim to Safeco, the issuer of their homeowner’s insurance policy (“the Policy”). Although Safeco provided partial payment, the Durkheimers claimed additional outstanding damages. Safeco asserted, as its sixth affirmative defense, that “[t]he Policy limits dwelling coverage to the ‘Residence Premises’ . . . [and t]o the extent that [the Durkheimers] did not reside at the Premises when the Loss occurred, the Policy does not cover damage sustained to the Property.” The Durkheimers moved to strike this affirmative defense on the ground that it is insufficient as a matter of law.
The Court agreed with the Durkheimers. The phrase “owned and occupied” is merely a “description” of the property at the time the policyholder obtained insurance.
The USDC held that the insured’s lease of their residence to a third party did not forfeit coverage under a homeowner’s policy for “residence premises” where the policy defined that term as “where you reside.” The court explained that the phrase “where you reside” “could be grammatically interpreted to modify only ‘part of any other building,’ not ‘family dwelling.’”
When a policy leads to multiple reasonable interpretations, that policy does not “explicitly and unambiguously” terminate a homeowner’s policy. Even if a policy is phrased in a way that covers only family dwellings where a policyholder resides, that residence requirement applies to when the policy was first purchased, and not when a claim was filed.
The Durkheimers’ insurance policy did not specifically and unequivocally put them on notice that their coverage would end if they did not reside in the house in question and granted the Durkheimers’ motion to strike.
The Court concluded that the policy is ambiguous, and that therefore, the Durkheimers’ policy did not explicitly put them on notice that they needed to reside at the property to maintain coverage and the Court granted the Durkheimers’ motion to strike.
ZALMA OPINION
Most states have interpreted the fact that a homeowners policy requires an insured to reside in the dwelling for coverage to apply so, if the insured moves out during the policy term, the coverage is void unless the insured advises the insurer and modifies the policy to tenant occupied and pays any additional premium. The USDC, applying Oregon law found the language to be ambiguous and, therefore, reject the defense that the Durkheimers’ did not reside in the residence premises at the time of the loss but did reside there when the policy was issued. Since the weight of authority across the country is different there is a possibility that an appeal will move forward and a different result will occur.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Detail Charging Defendant for Fraud is Sufficient
Post 5242
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Charges that Advises the Defendant of the Crime Cannot be Set Aside
In United States Of America v. Lourdes Navarro, AKA Lulu, No. 25-661, United States Court of Appeals, Ninth Circuit (December 4, 2025) Lourdes Navarro appealed the district court’s denial of her motion to dismiss the indictment and enter final judgment was in error.
FACTUAL BACKGROUND
The indictment alleged that insurers reimburse only for medically necessary services. Navarro performed unnecessary respiratory pathogen panel (RPP) tests on nasal swabs collected from asymptomatic individuals for COVID-19 screening.
Navarro billed over $455 million to insurers for those additional RPP tests that she knew to be medically unnecessary. These allegations constituted a plain, concise, and definite written ...
Louisiana Statute Prevents Enforcement of Contract Term Requiring Arbitration of Disputes
Post 5241
Read the full article at https://www.linkedin.com/pulse/international-convention-requiring-enforcement-award-barry-sttdc, see the video at and at and at https://zalma.com/blog plus more than 5200 posts.
In Town of Vinton v. Indian Harbor Insurance Company, Nos. 24-30035, 24-30748, 24-30749, 24-30750, 24-30751, 24-30756, 24-30757, United States Court of Appeals, Fifth Circuit (December 8, 2025) municipal entities including the Town of Vinton, et al sued domestic insurers after dismissing foreign insurers with prejudice. The insurers sought arbitration under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “Convention”) but the court held Louisiana law — prohibiting arbitration clauses in such policies—controls, as the Convention does not apply absent foreign parties who ...
Refusal to Provide Workers’ Compensation is Expensive
Post 5240
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In Illinois Department of Insurance, Insurance Compliance Department v.USA Water And Fire Restoration, Inc., And Nicholas Pacella, Individually And As Officer, Nos. 23WC021808, 18INC00228, No. 25IWCC0467, the Illinois Department of Insurance (Petitioner) initiated an investigation after the Injured Workers’ Benefit Fund (IWBF) was added to a pending workers’ compensation claim. The claim alleged a work-related injury during employment with the Respondents who failed to maintain workers’ compensation Insurance.
Company Overview:
USA Water & Fire Restoration, Inc. was incorporated on January 17, 2014, and dissolved on June 14, 2019, for failure to file annual reports and pay franchise taxes. It then operated under assumed names including USA Board Up & Glass Co. and USA Plumbing and Sewer. The business ...
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 ...
