Transferring Title & Entering into Lease Destroys Coverage

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Insurance is a contract. It must be read and enforced as written. When title to the property changes it is incumbent on the owners to advise the insurer of the changes. Failure to do so can be very expensive and destroy coverage.  After a trial court concluded that there was no coverage for a fire because the owner was not an “insured” Virginia Brenner and Amber Osmun, appealed the judgment of a trial granting summary judgment in favor of Goodville Mutual Casualty Company (“Goodville”). In Goodville Mutual Casualty Company v. Virginia C. Brenner, et al., 2021-Ohio-2252, No. WM-20-007, Court of Appeals of Ohio, Sixth District (June 30, 2021) the Court of Appeals was asked to reverse since the two plaintiffs were relatives.

ZALMA OPINION

Ms. Brenner and Ms. Osmun were their own worst enemies. They changed title and relationships from grandma to grand daughter while only insuring grandma as the only insured. Since grandma didn’t have an insurable interest in the garage she was not entitled to recover benefits from the policy, and since granddaughter Osmun was not an insured she could recover nothing. This problem could have been avoided by simply calling the insurance agent and changing the policy to comport with the change in ownership and the rental agreements.