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Allstate Sent Back to Square One by NJ Appellate Court (NJ)

September 5, 2019

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<p style="text-align: justify;">In<em> <a href="https://www.wcmlaw.com/wp-content/uploads/2019/09/Allstate-v.-Lynnes.pdf">Allstate v. Lynnes</a>,</em> the New Jersey appellate division recently reversed the trial court’s granting of summary judgment in favor of Allstate, sending the parties back to court to further litigate whether or not an Allstate policy should provide coverage for claims arising out of a March 2015 auto accident.</p>
<p style="text-align: justify;">The accident involved a vehicle driven by the defendant-insured, who was fatally injured.  He was driving a vehicle owned by his girlfriend, and was living with her at that time.  The defendant-insured was also named on his step-father’s Allstate automobile liability policy. The Allstate policy listed his address as a residence owned by his step-father.</p>
<p style="text-align: justify;">The trial court found dispositive the fact that the defendant-insured was not a “resident relative” under the Allstate policy at the time of the accident because he was living at his girlfriend’s home.  Therefore, the court held it followed that there was no coverage due under the Allstate policy for the accident.</p>
<p style="text-align: justify;">The appellate decision, reversing and remanding this decision, mandates courts to apply a much more nuanced analysis of the “resident” policy term when determining coverage issues.  The court explained in detail that New Jersey recognizes that a person can have more than one residence – even an adult when their life is in a prolonged “state of transition.”  Specifically, the appellate court held that the defendant-insured in this action had moved back in with his parents following a divorce, then on to a rental properly owned by his step-father, and then into his girlfriend’s home, all the while collecting mail at his parent’s home.  Thus, although he indisputably resided somewhere else on the date of the accident, he could still be considered a “resident relative” under the Allstate policy.  And if he is, then coverage would be owed.</p>
<p style="text-align: justify;">This analysis, the court held, accords with the reasonable expectations doctrine, in which a named insured would expect there to be coverage for each of the drivers listed on a policy declarations page.  It follows that auto liability policy insurers will have to analyze and consider the particulars of an insured’s living situation and life circumstances before disclaiming on the grounds that he or she is not a “resident relative.”</p>
<p style="text-align: justify;">Thank you to Vivian Turetsky for her contribution to this post.  Please email <a href="mailto:chayes@wcmlaw.com">Colleen E. Hayes</a> with any questions.</p>

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