Home Again, Home Again, Jiggity Jig ' Are Pennsylvania Courts Misconstruing The Residency Requirement?

• Published date: 23 June 2022
• Subject Matter: Insurance, Insurance Laws and Products
• Law Firm: Butler Weihmuller Katz Craig LLP
• Author: Mr Adam B. Masef

Residency has long been the touchstone of insurability when it comes to homeowners insurance. Courts applying Pennsylvania law have held that residency is a condition precedent to insurance coverage under a policy insuring a 'residence premises.' For insured homeowners, this means that the insured actually needs to live in their home in order for it to be considered a residence covered by their homeowners policy. Unfortunately, several recent decisions from federal courts in Pennsylvania have construed this requirement very loosely, resulting in unintended consequences for insurers.

The model homeowners insurance policy'the Insurance Services Office's HO 00 03 10 00 (the 'HO-3')'captures this concept through the following policy language:

SECTION I - PROPERTY COVERAGES

1. Coverage A - Dwelling
   1. We cover
      1. The dwelling on the 'residence premises' shown in the Declarations .

* * *

'Residence premises' means:

1. The one family dwelling where you reside;
2. The two, three or four family dwelling where you reside in at least one of the family units; or
3. That part of any other building where you reside;
   and which is shown as the 'residence premises' in the Declarations.

* * *

In this policy, 'you' and 'your' refer to the 'named insured' shown in the Declarations . . . .

A critical issue over which there has been much litigation is whether the insured actually 'resides' at the insured property. Recent cases from federal courts in Pennsylvania have dealt with this exact issue.

In Bobbi-Jo Isenberg v. State Farm Fire and Casualty Company, No. 21cv1147, 2022 WL 1720334 (W.D. Pa. May 27, 2022), the policy was issued to plaintiff in 2018 when she purchased a fixer-upper home located in New Castle, Pennsylvania for $30,000. At the time of the purchase, plaintiff was living in an apartment 2.1 miles away. Plaintiff continued to rent her apartment through 2021 while she engaged in unexpected and extensive renovations on the home.

On May 13, 2020, a fire destroyed the home, prompting plaintiff to file a claim under her homeowners insurance policy with State Farm. During the course of its investigation, State Farm rescinded the policy because it believed that plaintiff was not residing at the property, but was still living at the apartment with her family. Subsequently, plaintiff filed suit in the Pennsylvania Court of Common Pleas, Philadelphia County, and State Farm removed the case to federal court. State Farm eventually filed a motion for summary judgment...