Grandson Not Covered Under Grandma’s Home Insurance

A homeowner’s insurer was right to deny a grandmother coverage for a claim against her grandson because he did not qualify as a member of her household.

The Massachusetts Appeals Court agreed with Arbella Mutual Insurance Co. that the grandson was not a member of the grandmother’s household for insurance purposes just because she provided him with financial support.

The appeals court rejected the argument that financial support was by itself enough to prove the grandson was a resident and therefore covered under the homeowner’s policy.

With its ruling, the appeals court reversed a Norfolk County trial court that ruled that Arbella had to pay $300,000 to cover a personal injury judgment against the grandson Steven for injuring a police detective.

Because Steven was unable to satisfy the $300,000 judgment, the detective brought an action against Arbella to indemnify the grandson even though Steven did not himself have an insurance policy with Arbella.

Instead, the detective’s suit alleged that Steven was covered by an Arbella insurance policy purchased by his grandmother for her East Longmeadow home. After a trial, a Superior Court judge found that Steven, at the time he injured the detective, was a resident of his grandmother’s household because she owned and paid a lot of the costs on a house in Ludlow where Steven and his parents lived.

Although the grandmother asked Steven’s parents for rent, she would frequently excuse their missed rent payments. The grandmother also paid the mortgage, the taxes, and the water and sewer bills. That was the nature and extent of the financial support Steven received from his grandmother.

The grandmother had policies for both properties she owned. The Ludlow policy was a dwelling policy that covered liability for insured members for injuries which accrue or arise on the property covered. The East Longmeadow policy was a homeowner’s policy that covered liability for insured members under the policy, regardless of where the alleged injury occurred. The injury to the detective did not occur on or arise on the Ludlow property. Thus, the Ludlow policy could not be used to indemnify Steven.

Therefore, the only policy at issue was the Longmeadow homeowner’s policy since it covered liability for insured members regardless of where the alleged injury occurred. Steven was not a named insured. The policy defined those covered by the policy as the named insured and “residents of [their] household.”

The plaintiff and the appeals court looked to a 1991 Massachusetts Supreme Judicial Court opinion (Vaiarella v. Hanover Ins. Co.) for guidance on whether Steven could be considered a “resident of [the] household.”

In Vaiarella, the state Supreme Judicial Court set forth several factors to consider when deciding whether someone is an insured under an insurance policy, where the definition of “insured” is ambiguous. Those factors include: (1) whether the individual has an established connection to the named insured’s household; (2) whether the individual uses the same address as the named insured for matters such as receiving mail, registering a car, or applying for a driver’s license; (3) in the case of an accident, whether the individual went to the named insured’s household after the accident; (4) whether the individual has a financially dependent relationship with the named insured; and (5) the subjective intent of the individual to become a member of the insured’s household.

The plaintiff detective conceded that the only Vaiarella factor present in Steven’s case was financial dependency. The plaintiff successfully argued at trial that it alone was enough to qualify the grandson as a household member under the policy.

The appeals court agreed that the financial support was the only factor in Steven’s case but found that single factor was not by itself enough for him to be considered a household member under the policy.

The appeals court noted that it had previously found that weight given to financial dependency is lessened in the case of relatives for whom there is no legal responsibility to provide financial support. Steven’s grandmother had no legal responsibility to provide for him.

Also, contrary to the detective’s claim, financial dependency was not the sole basis for the court’s holding in another case where an adult son was found to be a member of his father’s household. Rather, that opinion weighed several factors including that the son lived at the relevant address, received mail there, kept his belongings there, and his father remained actively involved with the family at that address.

The appeals court noted that there was “little to no established connection” between Steven and his grandmother. He spoke to or saw her just once in the years surrounding 2016, when the injury to the plaintiff occurred. The grandmother also did not claim Steven as a dependent on her taxes. Additionally, Steven did not receive mail at the East Longmeadow address, nor did he have a car registered to the East Longmeadow address or a driver’s license with the East Longmeadow address.

Furthermore, the appeals court stressed, had the Supreme Judicial Court in Vaiarella thought that financial dependency outweighed other factors, the high court would have said as much. But it did not. “Instead, in Vaiarella, the court addressed five nonexclusive factors and did not state, nor even suggest, that economic dependence is a ‘trump card’ over the other factors,” the appeals court explained.

The appeals court concluded that Steven, as a matter of law, was not a member of his grandmother’s household and not insured under the East Longmeadow policy.