United States: Georgia Appellate Court Finds Definition Of "Residence Premises" Ambiguous

A Georgia appellate court recently held that a policy definition of "residence premises" is ambiguous, requiring a construction of the policy in favor of coverage. Lee v. Mercury Ins. Co. of Ga., et al., 808 S.E.2d 116 (Ga. Ct. App. 2017).

The insured made a claim under his insurance policy for damage to insured premises as a result of a fire loss. The insured lived with his wife elsewhere, but owned and paid the mortgage payments for the insured residence. The insurer denied the claim, and the insured filed a breach of contract suit. The insurer moved for summary judgment alleging that the insured failed to reside at the insured residence as required by the policy. The insured cross-moved for summary judgment, asserting he was entitled to judgment in his favor on the issue of coverage under the terms of the policy. The trial court granted the insurer's motion for summary judgment. The insured appealed.

On appeal, the insured argued that the policy provisions expressly cover the loss at the insured residence and the insured residence qualified for coverage under the policy terms. The appellate court noted that the policy definition of "residence premises" is ambiguous, thereby requiring construction of the policy in favor of coverage and precluding summary judgment in favor of the insurer. The term "residence premises" was defined as "one, two, three or four family dwelling, condominium or rental unit, other than structures and grounds, used principally as a private residence; where you reside and which is shown in the Declarations." The appellate court held that the placement of the semicolon in the definition of "residence premises," the policy's lack of definition of the term "reside," and the lack of an express condition requiring the insured to reside only at the insured premises creates an ambiguity precluding summary judgment in favor of the insurer. The appellate court reversed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.