Third-Party “Resident” Coverage under Homeowners Insurance Policy
In State Farm Fire v. Martinez, the Torreses held legal title to a home. The Torreses never lived or intended to live in the home, but rather the Torreses’ relative lived in the home. Insurer, State Farm, issued a homeowner’s policy to the Torreses, naming the Torreses as policyholders. A third party sued the policyholders and the relative after being bitten by the relative’s dog while a guest in the home that was owned by the policyholders where the relative lived. The insurer, State Farm, agreed to provide the relative with a defense, subject to a reservation of rights.
The insurer, State Farm, contended that the relative was not covered under the policy. Under the terms of the policy, the relative did not qualify as an insured because she was not a resident of the policyholder’s household, as that term was defined in case law.
The court in State Farm v. Martinez held that the policyholders and the relative maintained two separate addresses and independent households, each operating as separate domestic units. Therefore, the relative did not qualify as a resident of the policyholder’s household and, thus, was not covered under the policy.
State Farm Fire and Casualty Co. v. Martinez, 384 Ill.App.3d 494, 893 N.E.2d 975 (Ill.App. 2 Dist., 2008).
