Although courts often strain to find insurance coverage, the plain language of the policy sometimes cannot be disputed.  In Almonte v. Castlepoint Insurance, a homeowner was out of luck when the premises contained one too many dwellings.

On February 12, 2011, a fire occurred at plaintiff’s home, which was insured by Castlepoint Insurance Company.  Plaintiff’s homeowner’s policy limited coverage to a “residence premises”, defined in the policy as a one or two family owner-occupied dwelling.  Plaintiff filed a claim with Castlepoint, who disclaimed coverage on the grounds that plaintiff’s home was, in fact, a three-family residence.  Plaintiff initiated an action for damages and declaratory relief as to insurance coverage. 

 During a site inspection of plaintiff’s home, an investigator for Castlepoint found that in addition to the two living units on the first and second floors of the home, there was a third living unit in the basement.  Each of the three units had its own kitchen, bathroom, and living area, and the basement had a separate entrance.  Plaintiff’s response to a Notice to Admit also indicated that there had been a tenant living the basement for nine months at the time of the fire, who paid plaintiff rent each month.

 Castlepoint moved for summary judgment on the grounds that the third and separate living unit in the basement of plaintiff’s home rendered it a three family dwelling not covered under plaintiff’s policy.  The New York County Supreme Court granted Castlepoint’s motion, concluding that the basement apartment was a separate dwelling unit.  Based on the unambiguous language of plaintiff’s homeowner’s policy requiring the insured property to be either a one or two family dwelling, the Court found that plaintiff was not entitled to coverage.

 Thanks to Sheree Fitzgerald for her contribution.

For more information, contact Denise Fontana Ricci at .