Court Upholds Insurer's Denial of Coverage for Separate Mobile Home in New York

The New York State Supreme Court, Appellate Division, Fourth Judicial Department, ruled on a case involving homeowners insurance coverage in Barney v. Preferred Mutual Insurance Co. The plaintiffs owned a property with a primary residence and a separate mobile home they rented out. After the mobile home was destroyed by fire, the insurer denied coverage, leading to a breach of contract lawsuit. The court affirmed summary judgment in favor of the insurer, holding that the policy did not cover the mobile home as it was not part of the insured premises. Important factors included the mobile home's separate address, its status as a rental property, and that it was served by separate utilities. This decision emphasizes the need for property owners and insurers to clearly define covered premises, especially when multiple structures exist on one property but are used differently. The ruling provides clarity on coverage boundaries and could impact underwriting and claims handling practices, particularly for policies involving multiple buildings or rental structures on a single property. Insurers should ensure policy declarations accurately reflect all covered locations to prevent disputes. Likewise, property owners should verify the scope of their coverage in cases involving distinct residential and rental units within the same general property area.