My May 2026 column about the enforceability of an exclusionary endorsement that was not listed in a policy’s schedule of endorsements began with this quotation that referenced “endorsements hiding in plain sight”:
“Insurance rarely fails loudly. It fails quietly, through definitions, territorial carve-outs, and endorsements hiding in plain sight.” — Yehuda Daniel Katz
I begin this month’s column with the same quote because it references policy “definiti
ons…hiding in plain sight.” This is a great quotation because it illustrates that many losses can be denied not by exclusions per se but by other policy provisions that may unexpectedly, under certain circumstances, result in a lack of coverage.
Coverage under insurance policies usually begins with an Insuring Agreement that establishes a broad basis for coverage. Then, to make the risk insurable an
d coverage affordable, the insuring agreement is whittled down by limitations in the policy, from deduc
tibles to special limits and conditions to exclusions. All too often we focus only on exclusions when advising customers.
In my September 2022 column, I wrote about an issue that I thought was mostly a histori
cal perspective of how coverage can be lost not by application of an exclusion but rather by an insuring agreement itself. As I explain in the aforementioned column, this issue
first came to my attention 22 years ago, and it took me 10 years to get ISO to address the issue and one insurance company to resolve the issue.
The vast majority of homeowners policies cover the dwelling on the “residence premises” shown on the policy’s declarations page. The term “residence premises” is defined in most policies to include the dwelling “where you reside.”
One interpretation of this language is, if you don’t reside in the dwelling at the time of the loss, you have no coverage for damage to that dwelling. As my 2022
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column outlined, in a white paper I wrote that triggered my 10-year quest to resolve this issue, I gave numerous real-life examples of claims denied where insureds lost their homes or suffered six-figure uninsured losses. These denied c
laims weren’t the result of the application of an exclusion but rather arose from three words buried in a definition referenced in an insuring agreement.
Space doesn’t allow for a rehash of all of those examples, but I’ll provide a few recent ones that prompted this month’s column. In addition, next month I’ll be
doing a webinar for the Academy of Insurance where I will discuss the issues and solutions involved in this potentially catastrophic coverage gap in greater detail.
In his Insurance Coverage Law blog, policyholder attorney Chip Merlin discusses a fire loss to a Minnesota dwelling owned by an insured who had moved to Georgia at least two years earlier, though his sons continued to reside in the Minnesota home.
In Pour v. Liberty Mutual Personal Ins. Co., No. 24-1824, 2025 WL 3440993 (8th Cor. Dec. 1, 2025), the plaintiff had argued that “where you reside” was a descriptive te
rm applicable at the time of policy inception and not a warranty of continued residency. However, the court ruled that the father did not live in the dwelling at the time of the policy renewal nor at the time of loss, so there was no coverage.
