A homeowner’s insurer was right to deny a grandmother coverage for a claim against her grandson because he did not qualify as a member of her household.
The Massachusetts Appeals Court agreed with Arbella Mutual Insurance Co. that the grandson was not a member of the grandm
other’s household for insurance purposes just because she provided him with financial support.
The appeals court rejected the argument that financial support was by itself enough to prove the grandson was a resident and therefore covered under the homeowner’s policy.
With its ruling, the appeals court reversed a Norfolk County trial court that ruled that Arbella had to pay $300,000 to cover a p
ersonal injury judgment against the grandson Steven for injuring a police detective.
Because Steven was unable to satisfy the $300,000 judgment, the detective brought an action against Arbella to indemnify the
grandson even though Steven did not himself have an insurance policy with Arbella.
Instead, the detective’s suit alleged that Steven was covered by an Arbella insurance policy purchased by his grandmother for he
r East Longmeadow home. After a trial, a Superior Court judge found that Steven, at the time he injured the detective, was a resident of his grandmother’s household because sh
e owned and paid a lot of the costs on a house in Ludlow where Steven and his parents lived.
Although the grandmother asked Steven’s parents for rent, she would frequently excuse their missed rent payments. The gra
See more beautiful photo albums Here >>>
ndmother also paid the mortgage, the taxes, and the water and sewer bills. That was the nature and extent of the financial support Steven received from his grandmother.
The grandmother had policies for both properties she owned. The Ludlow policy was a dwelling policy that covered liability for insur
ed members for injuries which accrue or arise on the property covered. The East Longmeadow policy was a homeowner’s pol
icy that covered liability for insured members under the policy, regardless of where the alleged injury occurred. The
injury to the detective did not occur on or arise on the Ludlow property. Thus, the Ludlow policy could not be used to indemnify Steven.
Therefore, the only policy at issue was the Longmeadow homeowner’s policy since it covered liability for insured members regardless of where the alleged injury occ
urred. Steven was not a named insured. The policy defined those covered by the policy as the named insured and “residents of [their] household.”
The plaintiff and the appeals court looked to a 1991 Massachusetts Supreme Judicial Court opinion (Vaiarella v. Hanover Ins. Co.) for guidance on whether Steven could be considered a “resident of [the] household.”
In Vaiarella, the state Supreme Judicial Court set forth several factors to consider when deciding whether someone is an insured under an insurance policy, where the definition of “insured” is ambiguous. Those factors include: (1) whether
the individual has an established connection to the named insured’s household; (2) whether the individual uses the same address as the named insured for matters such a
s receiving mail, registering a car, or applying for a driver’s license; (3) in the case of an accident, whether the individual went to the named insured’s household after the accident; (4) whether the individual has a financially dependent re
lationship with the named insured; and (5) the subjective intent of the individual to become a member of the insured’s household.