Hot Topics In Personal Lines

This seminar begins with a practically oriented inquiry into how losses are adjusted on a day-to-day basis.  The seminar introduces not only the two key adjustment valuation measures – “actual cash value” and “replacement cost” – but also stresses to the students that the concepts are not as uniform and concrete as industry practice may suggest.  It then explains why this matters and includes practical illustrations of loss adjustment scenarios in which it is either impractical, impossible, or at least implausible to recreate precisely what the insured had prior to the loss.  These situations include older homes with ornate or impossible to replace materials; farm structures which cannot be rebuilt; and similar instances in which loss adjustment or settlement is complicated.

The seminar then turns to the increasingly frequent and vexing problem of who is a “resident” of a household for insurance purposes.  For nearly two decades, states such as Indiana has used formulations such as, “[O]n the whole, the person will be a resident if all the facts demonstrate that he or she has maintained a ‘fixed abode’ in the household for some continuous time.”  (Allstate Insurance Co v. Shockley (S.D. In. 1991)).

Practically speaking, this is not of much assistance to producers.  The section (and the problem) is illuminated by examining some of the other rules for “residency,” such as:

• The person need not be a permanent member of the household.
• The person must possess the subjective intent to stay for more than a “transitory” period;
• That subjective intent may be found in objective words and actions.

The seminar then turns to issues connected with having a personal lines insured operate a business out of the insured home.  This section discusses the prevalence of such arrangements, and also how those arrangements are treated under industry standard forms.  This section concludes with a discussion of case law. 

Presenter  Richard S. Pitts