Author: VU Faculty
The 18 year old resident son of our insureds enlisted in the Army, went to boot camp for 14 weeks, and took 3 days leave. While riding in a pickup bed that overturned due to the driver's negligence, he was killed. A UIM claim has been filed, but the adjuster says he is no longer a resident relative. Is that right?
"The 18 year old resident son of our insureds enlisted in the Army, went to boot camp for 14 weeks, and took 3 days leave. While riding in a pickup bed that overturned due to the driver's negligence, he was killed. The driver's $20,000 BI and PIP are exhausted. The parents have $100,000 UIM coverage. Is he still a household member while in the military? He was not married and lived at home prior to enlisting. The adjuster says he is no longer an insured."
This is an important question. Obviously, you need to consider where the loss occurs since the PAP has territorial limits. Also, UM/UIM laws must be considered to ensure that the loss is covered aside from the issue of residency.
Here are the opinions of our personal lines faculty:
Yes. Permanent residence, absent evidence to the contrary, is the parents' home, not the military. You also have to consider any other exclusions in the policy, along with statutory issues. For example, if this were a liability claim involving the insured's negligence, you might have to consider the type of vehicle and whether an accident involves "business" use. However, from the standpoint of residency, I believe most courts would agree that the resident child is only temporarily away from home.
Nothing in the policy governs as the term is not defined. Submit and make the insurer deny and then pursue options. As I recall, a court case ruled a 38 year old, twenty-year Navy member who never lived except on base or ship was still a resident under his mother's homeowners policy. He still had a local drivers license and voted there.
In the Ohio case of Prudential v. Koby, a 32-year-old captain in the U.S. Army was ruled to have held dual residency at his home as well as that of his parents. The court stated, “…there was no requirement that, in order for a person to be a resident of the named insured’s household, such residence must be the sole or exclusive residence of the person.”
This might be more of a legal question for a court to decide. The PAP doesn't address this directly. It does say a "family member" has to be a relative who is a resident of the named insured's household. The dictionary defines "resident" as "a person who resides in a place." This is not very helpful. This might be similar to a college student who is away from home.
This is a very complex legal question...actually two legal questions. Each state has a body of case law that would have to be examined to determine if the 18 year old would still be considered a resident of his parents' household. The courts have looked at a number of factors...economic dependence, intent to return home, use of parents' address as theirs, age, still having their own room in the home, etc.
Each state has subtle differences in how they’ve interpreted things. So, another legal question will be which state’s law should be applied, the state of residency or the state of occurrence. This can also dramatically affect the amount and type of damages owed.
Updated: February 13, 2024
_______________________________________________________________________________________________
Copyright © 2024, Big “I" Virtual University. All rights reserved. No part of this material may be used or reproduced in any manner without the prior written permission from Big “I" Virtual University. For further information, contact jamie.behymer@iiaba.net.