Insurance policies are often laden with complex terms and conditions, some of which may not be fully understood until they become relevant in a claim. One such provision that often goes unnoticed but holds significant importance is the resident relative clause. This clause determines who is covered as an insured under a policy, specifically including relatives living in the same household as the policyholder.
In most cases, an insurance policy is tailored for the primary policyholder, but it may extend its coverage to other individuals, especially if they are family members living in the same home. Let’s delve into the intricacies of the resident relative clause and its implications for insurance coverage.
What Is a Resident Relative Clause?
A resident relative clause in an insurance policy typically defines “insureds” to include not only the named policyholder but also relatives who reside with the policyholder. These relatives are covered as additional insureds under the policy, meaning they are entitled to protection and coverage for specified risks under the same terms as the policyholder.
For example, in a standard auto insurance policy, the resident relative clause would extend coverage to a spouse, children, or other family members living in the same household. In the case of a car accident, these individuals would likely be protected by the policyholder’s insurance for liability or medical payments.
Key Considerations for Resident Relative Coverage
To fully grasp the scope of a resident relative clause, it’s essential to understand the following components:
- Residence Requirement: One of the primary qualifications is that the relative must live with the policyholder. The term “resident” is often a source of contention, as it is not always explicitly defined. However, courts typically interpret this to mean that the relative must have a permanent or consistent residence at the policyholder’s home. It doesn’t necessarily require that the relative spends every day in the home, but their living arrangement must reflect some level of permanence or regularity.
- Relationship to the Policyholder: The clause usually specifies that the relative must be related by blood, marriage, or adoption. This could include spouses, children, stepchildren, parents, siblings, and in some cases, other extended family members like cousins or aunts, provided they meet the residency requirement.
- Proof of Residency: In the event of a claim, the insurance company may require proof that the relative was living with the policyholder at the time of the loss or incident. This could be demonstrated through utility bills, rental agreements, or other documentation showing the relative’s residency at the address listed in the policy.
Common Disputes Around Resident Relative Clauses
While the resident relative clause offers broad coverage, disputes can arise, especially regarding the definition of residency. Courts have dealt with cases where individuals claim coverage under a resident relative clause only to find the insurance company disputing whether they actually lived at the policyholder’s address. In such cases, the court may look at factors like the relative’s intent to return to the home, where they receive their mail, or where their personal belongings are kept.
Real-Life Case Example
Our office had a case where our injured client was a pedestrian who was struck by a car in a hit-and-run accident. Our client was 70 years old and had serious injuries. The vehicle that struck our client was never identified, and the driver never located, even though there was a police report. Our client didn’t have any insurance. She did not drive, nor did she have an insurance policy under her name. Through some investigative work and questioning we found out she lived with her granddaughter. We come to find that her granddaughter had an auto insurance policy that contained uninsured motorist coverage. Through the resident relative clause, we were able to get the granddaughter’s insurance company to afford coverage for our client’s case and recovered a significant settlement for our client’s injuries.
Conclusion
The resident relative clause is a valuable provision in many insurance policies, ensuring that family members living with the policyholder receive similar protections. However, the ambiguity surrounding the definition of residency can lead to disputes, so it’s essential for policyholders and their families to understand how their insurance policy defines a resident relative. Knowing the terms of this clause can provide peace of mind and ensure appropriate coverage in the event of a claim.