Death, divorce, disease, disability and wealth often lead to situations where people may change homes or have multiple places to live. Anytime these happen, policyholders need to be careful that their residential insurance policies do not stop providing full coverage. This is a significant issue, as I noted in “Residence Premises” and Other Killer Exclusions, Part One.

The recent ruling in Curt Adkisson v. Safeco Insurance Company of Indiana 1 is a critical reminder of this issue for policyholders and that the interpretation of “residence premises” in homeowner’s insurance policies can unknowingly haunt them. This Texas case illustrates how disputes over occupancy, vacancy and usage of the premises can determine whether an insurance claim is accepted or denied. For homeowners, the lessons learned from this case emphasize the importance of proactive communication with their insurance agents and maintaining clarity about the status of their insured properties.

Case Background

In February 2021, a historic freeze struck Texas, leading to widespread property damage. Curt Adkisson’s home in Longview, Texas, sustained significant water damage after pipes burst during the freeze. Although Adkisson filed a claim under his Safeco homeowner’s policy, Safeco denied coverage, citing the policy’s “freezing exclusion” for vacant or unoccupied dwellings where reasonable care to maintain heat or shut off the water supply had not been exercised.

Mr. Adkisson contested the denial, asserting that the property was not vacant or unoccupied and that he had taken reasonable care. The dispute culminated in Safeco’s motion for summary judgment, which the court ultimately granted. Central to the court’s decision was its interpretation of whether Mr. Adkisson “resided” at the property, as required by the policy.

Safeco argued that Mr. Adkisson’s property did not qualify as his “residence premises” at the time of the loss. According to Safeco, Mr. Adkisson primarily lived in Godley, Texas—a property he purchased in 2020, closer to his workplace. Safeco emphasized that the Longview home was largely unfurnished, with only an air mattress, a television, and minimal appliances. Safeco noted in its motion for summary judgment that utility usage at the Longview property was minimal and that Adkisson spent the majority of his time at his Godley residence due to work obligations.

In response, Adkisson argued that he frequently returned to the Longview property, spending weekends there to visit family and work on renovations. He maintained voter registration and essential mail at the Longview address, reflecting his intention to consider it his residence. Furthermore, he asserted that space heaters were in use at the property during the freeze, demonstrating reasonable care to maintain heat.

The Court’s Findings

The court ruled in favor of Safeco, concluding that Mr. Adkisson did not reside at the Longview property in a manner that met the policy’s definition of “residence premises.” The court highlighted several key points:

Primary Residence: While the policyholder may own multiple properties, the insurance policy’s coverage hinges on whether the insured “resides” at the insured location as their primary residence. The evidence suggested that Mr. Adkisson primarily lived in Godley, not Longview.

Vacancy and Occupancy: The court found that the Longview property’s state of disrepair and limited furnishings indicated it was not occupied in a meaningful sense. The presence of minimal belongings and limited utility usage further supported this conclusion.

Reasonable Care: Safeco’s denial also relied on the “freezing exclusion” clause, which exempts coverage for freeze-related damage if the insured fails to maintain heat or shut off the water supply. The court found insufficient evidence that reasonable care had been exercised to maintain heat or protect the property from freezing conditions.

Here are some takeaways for residential policyholders:

Clarify Residency Definitions and Status: Insurers often require the insured property to be the policyholder’s primary residence. If you own multiple homes or if you are living outside of what used to be your primary home for any reason, ensure you understand how your insurer defines “residence premises” and what evidence may be required to establish occupancy. Let your insurance agent know of the change by phone and in writing.

Document Property Use: Regularly document your presence and activities at insured properties, especially if they are not your primary residence. Maintain records of utility bills, repairs, and other evidence demonstrating active use and care of the property.

Communicate Changes: Notify your insurer and insurance promptly of any changes in how you use or occupy a property. Proactively discussing these changes can help avoid coverage disputes. This is my number one tip because there may be more changes than just residency, and the more interaction there is, the better a professional insurance agent can help.

Maintain and Monitor Properties: Take steps to protect properties you visit infrequently from damage. Ensure utilities are functional, heat is maintained in winter, and water systems are shut off when appropriate. Explain these activities in writing to your insurance agent and insurer.

The Role of Insurance Agents Regarding the Residence Premise Issue

Another critical lesson from this case is the value of regular consultations with your insurance agent. Schedule annual reviews of your policies to discuss changes in your living circumstances, property usage, or planned renovations. These conversations can help ensure that your coverage aligns with your needs and avoid misunderstandings about policy terms. These circumstances often come later in life when a loved one becomes sick, disabled and is living with others and not at the prior primary residence. Caretakers, loved ones, and even nursing home executives should alert insurance agents about the change of circumstances so that the fullest coverage can be maintained.

In, Do Insurance Agents Matter, I made the following comment:

People don’t read the insurance policies they purchase. Even if they tried to do so after the purchase, the terms are so confusing that few would fully understand what they bought. The small print in most insurance policies exclude, limit or except important protections.

In mass advertising, insurance companies never mention the dangerous small print buried it their product, which leaves customers vulnerable. Instead, the insurance company mantra is largely about price comparison and, occasionally, feel-good stories about the insurance company. Little is advertised about exactly what the consumer purchases, and comparisons are always based on price, not the actual insurance products.

…

Traditionally, insurance agents, especially independent insurance agents, have provided the consumer with knowledge, experience and advice about the various forms of insurance and the options available. Gaps and lack of benefits in coverage that leave customers without meaningful coverage in the event of a disaster are often avoided by competent insurance agents, licensed and regulated by states, who honestly explain the insurance products offered and purchased.

Nothing is ‘free.’ The mass marketing of important and costly financial products, such as auto insurance, without explanation to the consumer, hides the true costs of the product when it has to perform. The insurance industry invites negative impressions by failing to explain or warn its customers about the hidden costs contained in mass advertisements. These insurance companies are so cheap that they intentionally cut out the cost of the insurance agent, who has the role to explain what it is that is being sold to the consumer and the consumer’s available options.

Good insurance agents do matter. I get the feeling that most insurance companies that mass advertise only pay lip service to how important they really are.

The ‘residence premises” issue keeps arising in cases. My colleague Shaun Marker wrote about it earlier this year in The Meaning Of The Word “Reside” According to New York’s Highest Appellate Court. Mr. Adkisson’s inheritance of his father’s property in 2016 initiated nuances and complexities of insurance coverage most policyholders would never think of. The best way to avoid these disputes is to stay vigilant with insurance agent meetings about one’s life circumstances. By keeping your insurance agent informed about your life and changing risks, policyholders have the best avenue to avoid financial disaster caused by an uncovered loss.

The Role of Family, Real Estate, Probate and Elder Law Attorneys      

Family, probate, real estate, and elder law attorneys play crucial roles in addressing potential insurance issues that often arise during major life events. Family law attorneys can advise on maintaining proper coverage following divorce or separation. Probate attorneys can guide heirs in ensuring coverage for inherited properties. Real estate attorneys can review insurance obligations in property transactions, particularly for secondary or vacation homes. Elder law attorneys can counsel clients on updating policies to reflect changes in living arrangements often caused by health or deterioration. Collaboration between these legal professionals, clients and the clients’ insurance advisors is key to ensuring comprehensive protection during life’s transitions.

Thought For The Day

“Owning multiple homes can be a blessing, but it’s important to manage them so they enhance your life, not burden it.”
—Tony Robbins

1 Adkisson v. Safeco Ins. Co. of Indiana, No. 6:23-cv-00146 (E.D. Tex Nov. 15, 2024).