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The Rogak Report: 02 Feb 2007 * Homeowner's Insurance - Members of Household *

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  • Lawrence Rogak
    RELATIVES WHO LIVE IN HOUSE FULL-TIME WHILE OWNERS LIVE THERE PART TIME MIGHT BE MEMBERS OF HOUSEHOLD; TRIAL REQUIRED Auerbach v. Otsego Mut. Fire Ins. Co.,
    Message 1 of 1 , Feb 1, 2007
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      RELATIVES WHO LIVE IN HOUSE FULL-TIME WHILE OWNERS LIVE THERE PART
      TIME MIGHT BE MEMBERS OF HOUSEHOLD; TRIAL REQUIRED

      Auerbach v. Otsego Mut. Fire Ins. Co., 2007 NY Slip Op 00590
      (Appellate Division, Second Department)

      Otsego Mutual issued a fire insurance policy to Recep Akgun and
      Angelina Akgun for a house in Huntington, New York. The plaintiffs,
      who are the Akguns' son-in-law and daughter, resided rent-free in the
      home, while the named insureds, the Akguns, lived in Florida at the
      time of the loss at issue. However, the Akguns had their own bedroom
      at the house, kept items of personalty throughout the house, received
      mail at that address, were free to stay at the house whenever they
      pleased, and in fact stayed at the house at various times for days,
      weeks, and even months at a time. After the house was involved in a
      fire, the plaintiffs sought to recover under the policy for their
      personalty and their additional living expenses. The defendant denied
      coverage, asserting that the plaintiffs were not insureds under the
      policy because the insured premises was not the Akguns' household
      under the policy. Pursuant to the policy, the plaintiffs were deemed
      insureds under the policy only if they were residents of the
      Akguns' "household."

      Supreme Court, Suffolk County, denied Otsego's Motion for summary
      judgment. The Appellate Division affirmed.

      "If an insurance policy is written in such language as to be doubtful
      or uncertain in its meaning, all ambiguity must be resolved in favor
      of the insured against the insurer," held the Court, citing Hartol
      Prods. Corp. v Prudential Ins. Co., 290 NY 44; Ruder & Finn v
      Seaboard Sur. Co., 71 AD2d 216, affd 52 NY2d 663. "The
      term 'household' repeatedly has been characterized as ambiguous or
      devoid of any fixed meaning (see e.g. Matter of Hartford Ins. Co. of
      Midwest v Casella, 278 AD2d 417; General Assur. Co. v Schmitt, 265
      AD2d 299; Schaut v Firemen's Ins. Co. of Newark, 130 AD2d 477).
      Accordingly, the interpretation of the term requires an inquiry into
      the intent of the parties and must reflect 'the reasonable
      expectation and purpose of the ordinary business man when making an
      insurance contract' and the circumstances of the particular case must
      be considered."

      "Here, there is a triable issue of fact as to whether the home in
      question was the Akguns' household for the purpose of the insurance
      policy."

      Therefore the issue of plaintiffs' status as members of the insureds'
      household requires a trial.

      Comment: I don't think this is one that the insurer is going to win.
      The plaintiffs are the daughter and son-in-law of the owners, and the
      owners come and go as they please, with their own room reserved for
      themselves and their own possessions throughout the house. A lot of
      ordinary people have arrangements like this. While a lot of
      testimony will likely come out about who lives where, and when, the
      bottom line is that these people are family, they all live in the
      same part of the house, and the term "household" is fuzzy. Even a
      tie goes to the insured.

      Larry Rogak
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