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October 1, 2019
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Terrell v. State Farm General Insurance Company, A152541 [Sept. 26, 2019]
Plaintiffs purchased a homeowner's policy from State Farm to insure a house they owned and rented to tenants. Plaintiffs did not purchase a rental dwelling policy, which would have covered their liability as landlords, because they contemplated moving back into the house. A tenant was injured when the front porch of the house collapsed.
State Farm denied coverage based on a policy provision excluding coverage for bodily injury arising out of the insureds’ business pursuits or rental of the premises. The exclusion contained an exception for “activities which are ordinarily incident to non-business pursuits.” The trial court granted State Farm’s motion for summary judgment, holding the rental exclusion barred coverage.
The Court of Appeal affirmed, holding the exclusion was clear and unambiguous. The court held the exception to the exclusion did not apply because the insureds’ conduct in maintaining the porch was directly related to their business of renting the property, even though they might have engaged in the same conduct had they been residing on the property.
Plaintiffs purchased a homeowner's policy from State Farm to insure a house they owned and rented to tenants. Plaintiffs did not purchase a rental dwelling policy, which would have covered their liability as landlords, because they contemplated moving back into the house. A tenant was injured when the front porch of the house collapsed.
State Farm denied coverage based on a policy provision excluding coverage for bodily injury arising out of the insureds’ business pursuits or rental of the premises. The exclusion contained an exception for “activities which are ordinarily incident to non-business pursuits.” The trial court granted State Farm’s motion for summary judgment, holding the rental exclusion barred coverage.
The Court of Appeal affirmed, holding the exclusion was clear and unambiguous. The court held the exception to the exclusion did not apply because the insureds’ conduct in maintaining the porch was directly related to their business of renting the property, even though they might have engaged in the same conduct had they been residing on the property.
