I am handling a case on behalf of an insurance company. Coverage C of their homeowners policy is at issue in this bad faith case whereby the insured seeks 100 percent reimbursement for loss of personal property in the Oakland fire storm of October, 1991.
The policy states that the company's limit of liability for personal property usually situated at an insured's residence, other than the residence premises, is 10 percent of the limit of liability for coverage C. Personal property in a newly acquired principal residence is not subject to this limitation for the 30 days immediately after you begin to move the property there.
In this case, the insured moved from her insured residence premises to live with her new husband at his rented dwelling. This rented dwelling burned in the firestorm. The insured claims she moved the vast majority of her property only one week before the fire. The insured also claims that she did not make her final decision to permanently live with her husband at his dwelling until one week prior to the fire.
The insured and her husband were married in August of 1991. The insured began to reside with her fiance at his residence on a part-time basis in June of 1991. At her deposition, the insured testified that several items of personal property were moved to her husband's home by the time of their marriage; however, substantial item of personal property remained in the insured's home at this time.
The insurance company takes the position that because the insured began to move her personal property more than 30 days prior to the date of the loss, the 10 percent limitation of coverage C applies. The insured disagrees and takes the position that because she did not decide to move until one week prior to the fire, and because she did not move a large amount of her personal property (i.e., furniture) until one week prior to the fire, the 30 day period did not lapse and the 10 percent limitation should not apply.
Our questions to you: what is the purpose of the 10 percent limitation contained in coverage C? When does the 30 day period commence?
California Subscriber
We believe the policy to be clear on the matter. The 30-day time limit for 100 percent duplicate contents coverage (old house and new house) begins when the insured first moves the first personal property into the new location. After 30 days are up, the insured has only 10 percent of the coverage C amount at the new location.
The purpose of the 30 day limit is to give an insured the opportunity to “get things in order” for insurance. The 30 days gives the insured enough time to contact his agent and make the necessary changes. Unfortunately, the 30-days period cannot be said to begin when the insured “makes the decision to move.” This is too subjective for interpretation.
Again, the policy says that the 10 percent limitation does not apply (thus giving 100 percent coverage at a new home) “for the 30 days immediately after you begin to move the property there.” An objective observation of this situation indicates that the insured began “to move the property” into her husband's home when they got married and began living together full time (which was more than 30 days prior to the fire).
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