Is Your Child Covered Under Your Policy?

Insurance attorneys in Dallas and Fort Worth need to be able to give advise on the above question. An Austin Division, Western District case is a good read for attorneys. The style of the case is, State Farm Fire and Casualty Company v. Clayton J. Neuman.
Clayton Neuman was the driver of a car that crashed on November 11, 2011. A passenger in the car, Ellis McClane was killed. Neuman sought coverage under the umbrella policy that Neuman’s parents had with State Farm. State Farm filed this Declaratory Judgment action to determine whether or not they had any responsibility under the policy.
The policy had been issued to Grover and Laura Neuman in September of 2009. The policy provides coverage for to “insureds” and defines “insureds” as “you or your relatives whose primary residence is your household.”
Clayton lived with his parents in their Lynncrest house from the time he was born in 1991 until he graduated in June 2009. Immediately upon graduating, Clayton signed a year-long lease and moved into an apartment called the “183 Apartment.” Clayton’s girl friend, Sarah, moved in and they lived together with the child they had together and were married in June 2010. After a year they moved to the “Palmer apartment.” They lived there from August 2010 until April 2011, at which time, Sarah moved back in with her parents. Clayton remained at the Palmer apartment and renewed the lease for an additional year in 2011. Clayton was employed as a waiter at a local pizza place, but after renewing his lease, left his job and enrolled in Austin Community College. Clayton received financial assistance from his parents and Clayton maintained custody of his child for approximately three days a week at his Palmer apartment. The night of the accident, Clayton had lived at the Palmer apartment for about fifteen months and had nine months left on his existing lease. Clayton and Sarah testified to living in their apartments except on holidays when they would stay over at Clayton’s parents. Clayton did not contribute to maintenance upkeep, taxes, or other costs related to the Lynncrest house.
Clayton kept almost all of his belonging essential for daily living at his apartment. The only items left at the Lynncrest house were childhood momentoes.
Most of the forms and documents completed by Clayton after moving out of his Lynncrest house bear one of his apartment addresses. His apartment was also where he had mail delivered, including utility bills and packages related to online purchases. Various employment documents, tax returns, drivers license, and voter registration card, listed one of the apartments as his address. In contrast, the Lynncrest house address was used for his health insurance card and for his bank account. Others, including Clayton’s dad, testified that the apartments were Clayton’s primary address.
In analyzing the meaning of “primary residence” the Court looked at a list of factors to consider in determining which residence is most important based on a totality of the circumstances:
1) how often a person stays at a residence;
2) how transient he is;
3) how long he has resided in a residence;
4) where he keeps his belongings;
5) whether he lists a residence on important documents, including his “permanent address”;
6) whether he owns or rents – and if he rents, the length of the lease;
7) whether he has plans, or will be required to vacate a residence;
8) whether he contributes to maintenance, upkeep, property taxes, or other costs;
9) whether he shares a residence with others;
10) whether blood or other legal relationships exist between him and others living in the residence;
11) whether he has full and free access to a residence and its contents;
12) the subjective views of the person and the other people living in his residences.

While no one factor is dispositive, where a person spends the majority of his time is the most important factor. Consequently, a person’s “primary residence” will generally be the dwelling in which he spends the majority of his time.
This Court then spent time looking at the facts of the case and ruled in favor of State Farm. This opinion is a good case to read for an attorney to have an understanding of what the Courts look at on this issue.