Residency Requirement: Campbell v. State Farm Fire and Casualty Co.

The U.S. District Court for the Western District of Pennsylvania recently held that the residency requirement of a homeowner’s policy was not met following a fire loss because the policyholder had not lived at the insured residence for two years. The plaintiff alleges breach of contract and bad faith on behalf of the defendant insurer. The relevant insurance policy defined a dwelling as one “used principally as a private residence on the residence premises shown in the Declarations.” The court found the policy language unambiguous.

Accordingly, the Pennsylvania Supreme Court proceeded to define a “residence,” as “a factual place of abode evidenced by a person’s physical presence in a particular place.” The court rejected the plaintiff’s arguments, reasoning that the her intention to return to the property, ability to keep up with payment of insurance premiums, attendance to the lawn, periodic visits, and storage of items within the home, were insufficient to establish residency as required under the policy. The undisputed fact that the insured had not lived at the residence for two years prohibited her from receiving coverage under the policy for the loss at issue.