Auto-Owners Insurance Company v. Loveless et al

Auto-Owners Insurance Company filed a declaratory judgment action against its insureds, Rick and Debra Loveless, and their son Kaleb, seeking to deny underinsured motorist (UIM) benefits for injuries Kaleb sustained in a 2016 car accident. The insurer argued Kaleb did not qualify as a “resident relative” under the policy because he had temporarily lived away from home for education and planned independence. The U.S. District Court for the District of Utah ruled that Kaleb was a resident relative, and Auto-Owners appealed. On August 22, 2023, the Tenth Circuit Court of Appeals affirmed, holding that under Utah law, Kaleb’s principal residence remained his parents’ home, based on his intent, ongoing connections, and the temporary nature of his absence. The decision mandated UIM coverage.

The United States Court of Appeals for the Tenth Circuit affirmed the district court's judgment, concluding that Kaleb Loveless was a resident relative of the named insureds at the time of the accident, thereby obligating Auto-Owners Insurance Company to provide underinsured motorist coverage.

Whether Kaleb Loveless qualified as a “resident relative” under the auto insurance policy, specifically whether a temporary absence for education interrupts resident status under Utah law.

The ruling clarified the criteria for determining “resident relative” status under Utah law, emphasizing the totality of circumstances over rigid physical presence. It provides guidance for insurers and policyholders in similar family residency disputes within the Tenth Circuit and may influence how insurance companies assess coverage when adult children temporarily live outside the household.