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Estate of Luster v Allstate Insurance Co Discussion

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Legal Reasoning Questions

1. Why did the court conclude that an unoccupied house did not necessarily create a substantial

increase in hazard?

In this case of Estate of Luster v. Allstate Insurance Co, the court determined that there was not

increase in hazard due to the lack or occupancy or being occupied. The court mentioned that a

homeowner could put up security when the house was left unattended, which would therefore

make the house more secure. “Home security system topics are important to address because

burglaries happen on a regular basis due to neglect from homeowners and renters. To prevent

break-ins, people have to become familiar with ways on protecting their homes and be aware of

the tips on how to deal and report a crime to the police if they get in such a situation.” (Public

Safety Experts: A Look at Home Security, n.d.) As people age, their memory tends to fade

resulting in accidents such as not turning the stove off or leaving the lights on, which causes

greater risk to the house and person. While Allstate had some valid points, it did not cover the

issues of an elderly person living in the house causing an equal amount or more risk in the

home.

2. Why did the court hold that Allstate's cancellation of the policy, retroactive to November 2001

(when Luster moved to an extended-care facility), was ineffective?

“A retroactive date defines how far back in time a loss can occur for your policy to cover your

claim. If a claim happens prior to your retroactive date, your policy won’t provide benefits. It’s a

feature of claims-made professional liability or errors and omissions insurance” (Retroactive

Date, n.d.) Allstate’s policy clearly lined out that the insurer needed to cancel the policy if any of

the terms of the agreement were violated. Luster leaving the home unoccupied for years did in

fact violate the occupancy clause within the agreement. However, the court did stress the

importance of an insurance company notifying the insured if there is any intent to stop coverage

on a policy.

3. Was Luster's intent to return to her home when her health permitted sufficient to constitute

occupancy? Why or why not?

In this case, I can see it going either way but after going over the facts, Luster’s intent to return

home is not sufficient to constitute occupancy. The length of time she was gone was over a 30-

day span, which would be constituted a change in occupancy according to the U.S. Court of

Appeals. “Regardless of the owner's intentions, four and a half years of continuous absence of

human occupation constitutes a change in occupancy” (Clarkson, Miller, & Cross, 2018) The

information from the case provided the facts of her being vacant for more than 4 years and no

communication with Allstate about what was going on is insufficient for Luster to claim

occupancy, even though she was planning to return home. Allstate had requirements within the

policy and without discussing options with them, it made it easy to have it retroactive as of

November 2001.

References

Clarkson, K. W., Miller, R. L., & Cross, F. B. (2018). Business Law: Text and Cases. Boston: Cengage

Learning. Pages 970-971.

Public Safety Experts: A Look at Home Security. (n.d.). Retrieved from Safe home:

https://www.safehome.org/resources/guide-securing-home/

Retroactive Date. (n.d.). Retrieved from InsureOn: https://www.insureon.com/insurance-

glossary/retroactive-date

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Legal Reasoning Questions 1. Why did the court conclude that an unoccupied house did not necessarily create a substantial increase in hazard? In this case of Estate of Luster v. Allstate Insurance Co, the court determined that there was not increase in hazard due to the lack or occupancy or being occupied. The court mentioned that a homeowner could put up security when the house was left unattended, which would therefore make the house more secure. “Home security system topics are important to address because burglaries happen on a regular basis due to neglect from homeowners and renters. To ...
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Tags: Luster v Allstate Allstate Insurance Co A Look at Home Security retroactive date US Court of appeals