1. Homeowner’s Insurance Does Not Generally Cover Tenants Who Are Injured on the Property

In the case of Terrell v. State Farm (2019) 40 Cal.App.5^th 497. Homeowners of a house in San Francisco were sued by the tenants when their front porch collapsed causing serious injuries. The owners sought defense and indemnity from State Farm, which denied their claim. The denial was based upon the exclusion within the standard homeowners insurance policy, excluding coverage for injuries arising out of an insured’s business pursuits or the rental of their home. The owners sued State Farm and lost.

The Court of Appeal affirmed the summary judgment in favor of State Farm. The courts have consistently upheld the “business pursuits or rental” exclusion. Under Civil Code § 1941, owners have an affirmative duty to maintain the home’s premises in a safe, habitable, and clean condition.

The owner tried to force State Farm to cover a commercial risk, which is more properly covered under more expensive commercial policies insuring rental properties.

Comment: Particularly with Airbnb and other temporary rentals, a property owner must make sure they have commercial insurance to cover their business risks and not a general homeowner’s insurance policy.