Hurt on Unlisted Property: How Ohio Courts Read Homeowner's 'Other Premises' Exclusions

Published May 18, 2011 · Ohio Supreme Court

Michael and Marilyn Hunter lived in Hamilton, Ohio, and carried a Westfield homeowner's policy on their house. They also owned a farm across the state line in Indiana, which they insured separately. On a July day, their minor grandson Terrell and another young relative were riding all-terrain vehicles on the farm. The other child drove her ATV toward Terrell and failed to turn away in time. She ran over him and his vehicle. Terrell suffered fractures of both femurs, an ankle, and his skull, among other injuries.

When Terrell's parents sued the Hunters, Westfield went to court to say its homeowner's policy owed nothing, because the injury happened on "other premises" the Hunters owned that were not listed on the policy. On April 20, 2011, the Supreme Court of Ohio said it was not that simple.

The exclusion

Nearly every homeowner's policy has a version of this clause. The Westfield policy excluded liability coverage for bodily injury "arising out of a premises" owned by, rented to, or rented out by an insured "that is not an insured location."

The idea behind the exclusion is reasonable enough: if you own a second property, the insurer that covers your house did not price the risk of a rotten porch step at your cabin. The fight is over how far "arising out of" reaches. Does it exclude every injury that happens to occur on the other property, or only injuries caused by the property itself?

Two lines of Ohio cases

Ohio's appellate courts had split. The Eighth District read "arising out of" broadly, so that any injury with a causal link to the other property was excluded. The Second District, which covers Dayton and Montgomery County, read it narrowly in a case called Guillermin: an injury arises out of the premises only if a dangerous condition of the premises caused or contributed to it.

The trial court and the Twelfth District sided with the broad reading and found no coverage. The Supreme Court took the case to resolve the conflict.

What the Court held in Westfield v. Hunter

In Westfield Ins. Co. v. Hunter, 128 Ohio St.3d 540, 2011-Ohio-1818, a divided Court adopted the narrower reading. The syllabus holds that an "other premises" exclusion bars coverage for premises-based claims, "such as claims that arise from the quality or condition of the premises," and for claims based merely on the insured's ownership of the land. But it "does not bar coverage of claims that arise from the insured's alleged negligence" when that negligence has nothing to do with the condition of the property.

The Court's reasoning rested on a basic rule of insurance law that every injured person should know: exclusions are read narrowly, and ambiguity is resolved against the insurance company. Under the broad reading, the Court observed, a homeowner would have no liability coverage at all for anything that happened on a second property, a result far beyond what the words "arising out of" clearly say. The Court put it memorably: that the misconduct took place on land "is a matter of the law of gravity, not the law of insurance."

Applied to Terrell's case, the complaint did not allege anything about the condition of the farm. It alleged that the Hunters knew the other child's reckless tendencies, had the ability and duty to control her, and failed to do so. That is a claim of negligent supervision, a personal failure, not a premises defect. If that is really what the claim is, the exclusion does not apply and Westfield must defend and pay. The Court sent the case back to the trial court to determine whether the negligent-supervision theory was genuine or merely a label used to get around the exclusion.

The Court also noted that insurers remain free to write broader exclusions, using language like "in connection with" rather than "arising out of," if they want to bar coverage more completely. Westfield had not done so.

Why this matters for injured people

This decision is important for anyone hurt at a relative's or acquaintance's second home, farm, rental property, or hunting land. Injuries on these properties are frequently severe: ATV and farm-equipment crashes, pond and pool incidents, falls from structures, firearms accidents. And the person responsible is often a family member whose only meaningful asset is an insurance policy.

Under the broad reading the insurer wanted, every one of those claims would have been excluded from the homeowner's policy on the insured's main residence, leaving the injured person to chase whatever coverage, if any, existed on the second property. Under Hunter, the question becomes what the insured actually did wrong. If a grandparent let a child ride an ATV she had no business operating, or failed to watch children near the water, that is negligence in supervision and conduct, and the homeowner's policy on the main residence can respond.

This is the second time this year the Supreme Court has refused to let an insurer stretch an exclusion past its words; we wrote about the first, involving the "intentional act" exclusion, in our post on Allstate v. Campbell. The lesson is the same. How the case is pleaded decides which policies pay.

What this means for you

• If you or your child was hurt on property that a relative or friend owns but does not live on, do not accept the insurer's claim that nothing is covered. Ask what the insured personally did or failed to do.
• The theory of negligence must be chosen carefully and supported with facts from the start. A claim about a dangerous condition of the land points to one policy; a claim about an adult's failure to supervise points to another. Often both should be pleaded.
• Identify every policy: the homeowner's policy on the main residence, any policy on the second property, farm or umbrella policies, and, in a vehicle case, any auto or UM/UIM coverage that might apply.
• Insurers file declaratory judgment actions to get out of these cases. Make sure someone is representing the injured person's interest in that lawsuit, not just the insured's.