A key issue for coverage is that the policyholder must live at the residence premises. Such premises are commonly defined in policies. Wording used in many HO forms define the residence premises as the dwelling “where you reside.” These three words create substantial consequences.
There are several instances where a named insured’s living arrangement may result in a loss of HO protection. Consider the following:
- A home with a person residing there as the result of a trust agreement
- A home’s owners are permanently residing at an assisted living facility and their children live in the home.
- A home is sold; the owners move to their new home, but permit the buyers to live in the previous resident until the closing.
It is important that agents be aware of changes in living circumstances and that policyholders report these changes promptly. Coverage gaps may be handled in various ways such as the use of a trust endorsement, voluntary acceptance of the living arrangement by an insurer to maintain coverage or replacing an HO with a dwelling fire policy.