Just imagine a situation where your insurance company gives you permission to leave your property vacant and unoccupied for as long as you want or need, but then denies you coverage claiming it was not where you were living. This is exactly what Allstate Insurance Company did, and this was exactly why we had to fight back.
In Harris v. Allstate, the Honorable John R. Padova of the Eastern District Court of Pennsylvania recently held that the residency requirement in many Allstate homeowner’s insurance policies is ambiguous. The court was faced with reconciling two provisions of the policy. First, the policy defines “dwelling” as follows:
“Dwelling – means a one-, two-, three- or four-family building structure, identified as the insured property on the Policy Declarations, where you reside and which is principally used as a private residence.”
The policy continues though and also provides the following “Permission Granted to You”:
9. Permission Granted To You
a) The residence premises may be vacant or unoccupied for any length of time, except where a time limit is indicated in this policy. A building structure under construction is not considered vacant.
b) You may make alterations, additions or repairs, and you may complete structures under construction.
In the end, the Court properly found this to be an ambiguity in the policy that must be read in favor of the insured, the homeowner.
This is a huge win for policyholders. Under Pennsylvania law, when any policy provision can be reasonably interpreted in more than one way, the ambiguity is resolved in favor of coverage for the insured. This means that homeowners with these policies cannot be denied coverage because they have multiple residences, were temporarily residing elsewhere when the loss occurred, or when the property is vacant or unoccupied at the time of a loss.
Case Details
In this case, the homeowner, Aaron Harris, purchased a house in August of 2017 and insured it with Allstate. A fire damaged the house in 2018 and while the insurance company was adjusting the claim, it learned that at the time of loss, Mr. Harris was renovating the insured property and, as a condition of his parole, was required to live with his girlfriend. Allstate denied the claim.
When we sued Allstate on behalf of Mr. Harris, Allstate took the position that the policy required residency at the time of loss and that Mr. Harris could not have met this requirement without violating his parole,
Allstate relies on the fact that the policy insured as “dwelling” to deny claims when an insured is living elsewhere when a loss occurs. Mr. Harris’s Policy, and countless nearly identical ones, defines “dwelling” as a “building structure, identified as the insured property on the Policy Declarations, where you reside…”
However, the Policy also includes a provision that “[t]he residence premises may be vacant or unoccupied for any length of time, except where a time limit is indicated by the Policy.”
Anthony DiUlio, Partner at Wheeler, DiUlio & Barnabei argued on summary judgment that this language makes the residency requirement ambiguous. How could Allstate require that the homeowner reside full time at the insured property while also allowing the property to be vacant or unoccupied without affecting coverage?
The Court agreed:
“The Policy in this case, like the policy in Ionata, provides that “[t]he residence premises may be vacant or unoccupied for any length of time, except where a time limit is indicated in this policy.” (See Policy at 13 of 19.) “We cannot reconcile Allstate’s position that Aaron Harris was required to reside solely at the Property as a condition of coverage with [this] clause that provides the Property may be vacant or unoccupied for any length of time.” Ionata, 2016 WL 4538756, at *3. We therefore conclude, as did the Ionata court, that the residence requirement of the Policy is ambiguous. Id. As we must construe this aspect of the Policy against Allstate and in favor of coverage.”
Emphasis added.
It held that these two provisions created an inherent ambiguity. Since the residency requirement is ambiguous, the provision will be construed to provide the greatest possible coverage to the insured.
The implications of this case could be significant. Do you have a second home? Do you have a vacation home that is vacant several months out of the year? Do you have a new home that you are renovating but not yet living in full time? Under these circumstances and many others like it, Allstate can no longer deny your claim because you weren’t residing exclusively at the insured house at the time of the loss.
Our team will not stand by and allow a massive corporation to take advantage of homeowners like you. If you have been denied a claim under this exclusion, you should contact us today to speak with an attorney at Wheeler, DiUlio, & Barnabei.
¹ Allstate Vehicle & Property Insurance Company v. Angie Harris, Administratrix for the Estate of Aaron Harris, Angie Harris, Administratrix for the Estate of Aaron Harris v. Allstate Vehicle & Property Insurance Company No. CV 20-1285, 2022 WL 4586135, at *7 (E.D. Pa. Sept. 29, 2022)
² Ranieli v. Mut. Life Ins. Co. of America., 413 A.2d 396, 400 (Pa. Super. Ct. 1979).
