Boyfriend is on title and mortgage - girlfriend helps pay mort and lives

[URDRWHO]

Ok here is the situation.

The boyfriend has his name on the Title and he is on the mortgage. Both boyfriend and girlfriend put money in when they bought the dwelling. Both have personal property in the dwelling -- some bought with joint money, some bought with individual money. Both live in the dwelling and share all the bills.

Now to the insurance.

Named insured, well that takes me to the who is actually what situation. The knee jerk reaction is to have him be named insured on the HO and she gets an HO-4 but wouldn't that that kind of leave her out of her insurable interest if the dwelling burns down?

Hm?? So I started thinking since insurance companies aren't kindly adding named insureds that have no skin in the game that perhaps an HO 04 41 Additional Insured Endorsement may work. I have to think about that one but I want to say I'm heading down the wrong path. I'm familiar with the commercial side of AI status but on a personal HO....I'm not confident. Would rights be granted that would protect the girlfriend. At best she would be granted rights for A,B,E & F but out of luck for C. Hm????

I know that the boyfriend and girlfriend have drawn up legal documents to protect their interests but I have yet to read them. I'm going to guess that in those documents exist a life estate arrangement for the girlfriend.

When live-ins jointly purchase a home in which they both will reside, ISO rules permit both to be Named Insureds on the Homeowners Policy. The problem is that they have a thinly veiled legal arrangement for buying the home.

Perhaps I could find something under the contractual liability exclusion where there is coverage for any written contract that directly relates to the ownership, maintenance or use of an "insured location." Could their signed documents meet the written contract rules and would it accomplish anything? Ha! But this isn't commercial Broad Form where a signed and written contract would grant someone AI status. Next my head will start wondering "who is" an insured in a BAP and start faltering on my initial task.

Maybe the clean and easy way is the HO-3 for the boyfriend and HO-4 for the girlfriend? Any ideas or maybe ask the insurance company(s) to write a joint policy?

 

[Derrick]

She can still be added a household member (explicitly even, at least with my carriers) and have an insurable interest without being a named insured. It's not like it's just some random stranger living in the household for a quick second, this is a long-term relationship with the other half paying the bills. But it's not like she's just renting the other half of the house and they are roommates.

It's almost 2020 and carriers know this. Call them up and get clarification on exactly what you want them to do. I know for one of my carriers even require you to sign a form that basically states, "Yeah, ya'll aren't married and you may not even be on the mortgage, but since ya'll are together we can extend coverage to you as well."

 

[URDRWHO]

You and I know this but those stodgy underwriters are sometimes stuck in the 1990's.

It's almost 2020 and carriers know this."

 

[fed up]

Don't quite follow what you might be asking and hate to assume but: He took out the mortgage in his name only and the house is titled to him only? Most policies are written to say "Named insured and resident spouse" without defining spouse. Put both names on the policy as occupants and I would endorse the policy to include her name as a named insured so that in the event of a total loss she is not stuck with the check being cut to him and the bank. he should not be able to cash a check if it has her name on it as well

 

[URDRWHO]

Hm? We had a President that tried a similar kind of defense when asking - define the word "is". It didn't turn out well for him and if I were a betting man a judge sitting high above on his perch would define spouse to me. Case closed - E&O carrier pay the bailiff.

But seriously trees and shrubs aren't defined either but I think we know what is a tree? Or better yet "In 1964, Justice Potter Stewart tried to explain "hard-core" pornography, or what is obscene, by saying, "I shall not today attempt further to define the kinds of material I understand to be embraced... but I know it when I see it".

Now given all the changes in society and all of the recent changes in the US, this word Spouse might be open to some interpretation. I would give you the shot in court to stand on the defense of what is a spouse. I'm surprised that nobody hasn't already tested it in court. But since husband-wife privilege is available in both civil and criminal cases, maybe who is a spouse is already settled. Maybe in a divorce case it could be argued, judge that was never my spouse.

In 35 years in the business I've never had a need to contact my E&O carrier to tell them to set up a possible claim and now I'm too old to even test it.

My wife and I are amazed that a man or women would put money into the purchase of a dwelling, continue to pay the cost to carry but not be named on any legal document. I know that I wouldn't do it.

Forty three years ago my wife and I bought a house before we were married but the mortgage was in our names and we were also noted as individuals on the deed. Clean and simple.

Don't quite follow what you might be asking and hate to assume but: He took out the mortgage in his name only and the house is titled to him only? Most policies are written to say "Named insured and resident spouse" without defining spouse. Put both names on the policy as occupants and I would endorse the policy to include her name as a named insured so that in the event of a total loss she is not stuck with the check being cut to him and the bank. he should not be able to cash a check if it has her name on it as well

 

[adjusterjack]

It would help to know what state in case there may be a question of common law marriage.

Otherwise, from a claims standpoint, two choices.

1 - Him (owner) as Named Insured on an HO-3 (or better). Her (tenant) on an HO-4.

2 - Him and Her as Named Insureds if your carrier will allow it.

As a claim rep I would have no issue with number 2.

Though the owner of the house might, as he contemplates a big claim check with both their names on it.

 

[URDRWHO]

This is in PA and I don't think the State recognizes common law marriages. Only about a dozen or so states recognize common law marriage.

The insurance is currently with Encompass Elite which is a fairly robust policy. Encompass underwriter said Encompass doesn't recognize common law marriage.

From the start I have felt that your #1 answer is the clean cut way to go.

Encompass has a combined limit currently that limit is

Property Location Limit (PLL)*
*Your Property Location Limit is 200% of the estimated residence value of $635,078
Limit $1,270,156

I had a claim where an entire block for an industrial building burnt down so I've seen total loses, yes they do happen. Claims coming in from railroads and everyone near the block...7 year PITA.

So if he suffered a total loss, if he received a big check, if they were having a lover's spat at the time, he might just be tempted to walk with that big check.
One can never know the when, the who or the what of the future.

Insurable Interest in my State.
Insurable Interests Defined: A Blog Series - Episode Two, Pennsylvania | Property Insurance Coverage Law Blog | Merlin Law Group

In a State next to me NJ

"On April 21, 2016, Merlin Law Group held a seminar for public adjusters in Red Bank, New Jersey, and during the presentation, Chip Merlin noted one of the first and most important things a public adjuster should do when assessing a new claim is to review the policy at issue to determine who is the named insured and whether that named insured owns the property. Getting this information locked down at the outset of a claim can help protect you from potential issues down the road."

Insurable Interests Defined: A Blog Series - Episode One, New Jersey | Property Insurance Coverage Law Blog | Merlin Law Group

The Hartford feels this way -

"Protecting Your Home
Your homeowners insurance needs depend in part on who owns the property.

“In ‘The Golden Girls’ TV show just one of the women owned that house, so she would have had homeowners insurance while the others had to buy renters insurance to cover their personal belongings and their personal liability issues,” says Worters."

It would help to know what state in case there may be a question of common law marriage.

1 - Him (owner) as Named Insured on an HO-3 (or better). Her (tenant) on an HO-4.

Though the owner of the house might, as he contemplates a big claim check with both their names on it.

 

[URDRWHO]

Not sure how driver got into the mix about HO but just got a message from CISR --

"I just spoke with ***********, Encompass Claims Advocate. He advised me that even adding girlfriend as a “Listed” driver does NOT provide any liability coverage for her. Please see attached page from the Encompass policy defining Covered Persons and Family Member.

There would be coverage for her personal property since she is a “guest” with permission under boyfriends policy.

Girlfriend would need an insurable interest in order to be added as a Named Insured or Additional Insured to boyfriend's policy. Since her name is not on the deed to the property, she does not have an insurable interest."

Girlfriend needs to obtain her own Renters insurance to be covered for liability." (I think I can agree with them).

I don't want to get into a legal fight with the claims advocate but case law doesn't support his basis of insurable interest. But if the insurance doesn't accept the risk, they don't have to defend any position.

My position on insurable interest would be based on the Supreme Court case in my State Luchansky v Farmers. The defense based their case on the idea that you do not need "legal" nor "equitable" title " to have an insurable interest. The case was Reversed and remanded for determination of the amount of appellants' fire loss which the "appellee-insurance company is contractually obligated to pay."


Luchansky v. Farmers Fire Ins. Co.

Luchansky v. Farmers Fire Ins. Co.

A case in Florida

Aetna Insurance Company v. King, 265 So. 2d 716 (Fla. Dist. Ct. App. 1972)

Aetna Insurance Company v. King, 265 So. 2d 716 – CourtListener.com

 

[adjusterjack]

The Encompass claims associate is wrong on several counts. For one thing, she is not a "guest" she is a "resident" and I do not believe that a court would define her as a guest.

I am also of the belief that one doesn't need title or ownership to have an insurable interest. The problem is that, without title or ownership, it's expensive to prove when the opposition says "no." I'm sure that Luchansky and King spent tens of thousands of dollars on litigation to get the decisions they wanted.

An ounce of prevention is worth a pound of cure. So get her listed as a Named Insured if the company will allow it. If it won't, get her an HO-4.

 

[Allen Trent]

HO4 is the way to go. Adding her on as a named insured, even if allowed, makes every claim check in the future a potential problem because most carriers issue the claim check in the name of all named insureds.

Or, he can add her to the title of the house if that is how they want it to be