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We have a claim where the client has an HO-3 policy, but had turned it into a rental property 2 years ago. The insured used to live in the home, which is why they were insured under an HO-3. However, they bought a larger home and moved into it a couple of years ago and they never changed the policy over to a DP3. The insured recently filed a claim for a small fire in the kitchen. The fire damage is not big at all, but there is some smell of smoke throughout the home.

 The claims adjuster for the insurer realized fairly quickly that this was a rental property and stated that they had the wrong policy. The adjuster stated that technically they could deny the claim, but that they were going to go ahead and pay to repair the damage from the fire and wipe down the home for the smoke. However, the adjuster did state that they would not be willing to clean the renters belongings of the smoke odor or even to pay to move them around (contents manipulation) while the work was being done to the structure.

 We have several questions:

 1. Could the insurer deny the entire claim since it was insured under a homeowners policy rather than a dwelling policy?

2. When insured under a DP3, we routinely see insurers making payment to move around the belongings of the renters so that repairs can be made to the structure. Why would this not be covered on this claim?

3. If an insurer owes to move the contents around to make way for the repairs to the structure, it would seem that they should also pay to remove the smoke odor from the contents as they would only re-pollute the interior with smoke odor – or cause the smoke odor from the structure to never be successful in being removed.

 Hawaii Subscriber

 The homeowners policy clearly states that coverage is for the named insured and the spouse, if a resident of the same household. An insured is "you" and residents of the household. "Residence premises" is defined as the one family dwelling where you reside. As the named insured does not live in the house, it is not his residence premises, and therefore coverage does not apply, even though he is the named insured. The carrier is fully within its right to deny the claim outright. Unless the Residence Premises Definition endorsement, HO 06 48 10 15, which provides coverage after the insured moves out of the home is on the policy, there is no coverage.

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