In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 12-2751

NORMAN E. SCHUCHMAN AND

GLENNA SCHUCHMAN,

Plaintiffs-Appellants,

v.

STATE AUTO PROPERTY AND

CASUALTY INSURANCE COMPANY,

Defendant-Appellee.

____________________

Appeal from the United States District Court for the

Southern District of Illinois.

No. 10 C 01024 — David R. Herndon, Chief Judge.

____________________

ARGUED DECEMBER 4, 2012 — DECIDED OCTOBER 23, 2013

____________________

Before BAUER and HAMILTON, Circuit Judges, and THARP, 

District Judge.

∗

 ∗

Of the Northern District of Illinois, sitting by designation.
2 No. 12-2751

THARP, District Judge. In September 2000, Norman and 

Glenna Schuchman purchased homeowner’s insurance from 

State Auto Property and Casualty Insurance Company 

(“State Auto”) to insure a residence in Junction City, Illinois. 

Almost ten years later, a fire severely damaged the insured 

house and the Schuchmans asserted a claim against the 

homeowner’s policy State Auto had issued. After a lengthy 

investigation, however, State Auto denied the Schuchmans’ 

claim on the basis that the Schuchmans were not residing on

the “residence premises,” as that term is defined by the 

policy, and because the Schuchmans were maintaining a 

residence other than at the “residence premises,” in violation 

of the policy’s Special Provisions. The Schuchmans argue

that the term “residence premises” is ambiguous and so 

should be liberally construed in favor of coverage. We agree

and, accordingly, we reverse the district court’s entry of 

summary judgment in favor of State Auto.

I. Background

1. The Schuchman Property

On November 10, 1980, Glenna (née Reed) Schuchman

purchased a parcel of land in Junction City, Illinois. The 

parcel was, and is, a contiguous tract of land consisting of 

eight lots, Numbers 9 through 16, of Block 45 of Junction 

City. The parcel is situated at the corner of West 14th Street 

and Madison Avenue. The southern boundary of the parcel, 

which runs along West 14th Street, is 150 feet wide. The 

parcel extends 400 feet north with Madison Avenue at its 

eastern boundary. In all, the property covers less than one 

and a half acres.
No. 12-2751 3

When Ms. Schuchman purchased the parcel, a single 

house was situated on the southern end of the property 

facing West 14th Street and the parcel’s southern boundary. 

Ms. Schuchman moved into this house after purchasing the 

property. In 1983, she married Norman Schuchman, who 

subsequently moved into the house with her. At this time,

the house had the mailing address, “Rural Route #1.”

In the late 1980s and early 1990s, Ms. Schuchman moved 

two mobile homes onto the property—one for her mother 

and the other for her stepfather. These mobile homes were 

together assigned a single mailing address, “Rural Route 

#2.” Sometime before 1993, however, the house and mobile 

homes were each assigned new mailing, or street, addresses. 

The house was assigned the address, “109 West 14th Street.” 

One mobile home was assigned “1406 Madison Avenue,” 

and the other “1408 Madison Avenue.” So far as the record 

reflects, the Schuchmans had nothing to do with the 

assignment of these addresses.

The Schuchmans never sold or severed any portion of the 

property. No physical barriers divide the lots or structures 

on the parcel. The property is not taxed by lot or address; to 

the contrary, the entire contiguous tract is identified by a 

single Property Index Number and the Schuchmans pay 

property tax based on the parcel as a whole. Separate title 

searches for 1408 Madison Avenue and 109 West 14th Street 

both return the same tract of eight contiguous lots owned by 

the Schuchmans.

On September 8, 2000, the Schuchmans submitted an 

application for homeowner’s insurance to State Auto

through an insurance broker, Michael Wethington and his 

firm Hudson-Gray Insurance Agency, Inc. The application 
4 No. 12-2751

listed 1408 Madison Avenue as the Schuchmans’ mailing 

address and 109 West 14th Street as the location of the 

property to be insured. On the application, the Schuchmans 

indicated that the house at 109 West 14th Street was owneroccupied by marking an “X” in the appropriate box. In 

response to a question whether they owned, occupied, or 

rented any other residence, the Schuchmans answered by 

marking an “X” in the box marked “No.” State Auto issued 

an insurance policy to the Schuchmans, and coverage under 

that policy was thereafter continued year to year.

Sometime before 2004, the Schuchmans moved two 

additional mobile homes onto the property near the mobile 

home bearing the 1408 Madison Avenue address; these new 

trailers shared the 1408 Madison address. The Schuchmans 

then moved from the house at 109 West 14th Street into 

these new mobile homes. At this time, Mr. Wethington 

informed Ms. Schuchman that the mobile homes would not 

be covered by the State Auto policy because State Auto did 

not insure mobile homes. The Schuchmans therefore 

purchased a separate policy from another company to insure 

the trailers. In that same conversation, however, Mr. 

Wethington also informed Ms. Schuchman that, so long as 

the Schuchmans continued to reside on the property, the 

house at 109 West 14th Street would continue to be covered 

by the State Auto policy.

At about the time the Schuchmans moved into the new

mobile homes, their son Richard moved into the house, 

where he lived until late 2008. After Richard moved out, the 

Schuchmans shut off the water and gas service to the house. 

Ms. Schuchman would occasionally enter the house to 

retrieve items stored there and to generally check on the 
No. 12-2751 5

condition of the building, but at no time after 2008 did the 

Schuchmans spend the night or cook or eat meals in the 109 

West 14th Street house. The Schuchmans’ plans were to stay 

in the mobile homes indefinitely; and although the 

Schuchmans “kicked” around some ideas of what to do with 

the house, including tearing it down or selling it, they never 

made any concrete plans.

In the early hours of May 23, 2010, a fire broke out at the 

109 West 14th Street house, severely damaging the building 

and its contents. The Schuchmans filed a claim with State 

Auto under their homeowner’s insurance policy to cover the 

damage to the house. After a lengthy investigation, State 

Auto agreed to provide coverage for the contents of the 

house, as the policy covered personal property “anywhere in 

the world.” However, State Auto denied coverage for 

damage to the house itself on the basis that “the home at 109 

W. 14th Street was not being used as [the Schuchmans’] 

‘residence premises,’ as that term is defined in the insurance 

policy.” Complaint, Dkt. 2-2, Ex. B at 2. State Auto also 

denied coverage for the building on the basis that the 

Schuchmans had violated the Special Provisions of the 

policy which required that the “residence premises” be the 

only premises where the Schuchmans maintained a 

residence.

2. The State Auto Homeowner’s Policy

With this background in mind, we turn to the relevant 

provisions of the State Auto policy. Under “SECTION I –

PROPERTY COVERAGES,” the policy states that, “1. We 

[(State Auto)] cover: a. The dwelling on the ‘residence 

premises’ shown in the Declarations, including structures 

attached to the dwelling.” 
6 No. 12-2751

Under “DEFINITIONS,” Section B.11 defines the term 

“residence premises” as:

a. The one family dwelling where you reside;

b. The two, three or four family dwelling 

where you reside in at least one of the family 

units; or

c. That part of any other building where you 

reside;

and which is shown as the “residence 

premises” in the Declarations.

“Residence premises” also includes other 

structures and grounds at that location.

The Declarations page of the policy, amended June 28, 2010, 

states, as follows:

THE PREMISES COVERED BY THIS POLICY 

IS LOCATED

109 WEST 14TH ST JUNCTION CITY, IL 62882

RATING INFORMATION – FORM 3, FRAME, 

CONSTRUCTED IN 1945, SECURGARD, 

PRIMARY RESIDENCE, PROTECTION 

CLASS 06, TERRITORY 051, FEET FROM 

HYDRANT 1000, FIRE STATION 3 MILES, 

$500 SECTION I LOSS DEDUCTIBLE, 1 

FAMILY, INSIDE CITY.

The “Special Provisions” of the policy set forth and 

require:

(a) The described dwelling is not seasonal; (b) 

no business pursuits are conducted on the 
No. 12-2751 7

described premises; (c) the residence premises 

[emphasis in original] is the only premises 

where you maintain a residence other than

business or farm properties; (d) the Insured has 

no full time residence employee(s); (e) the 

Insured has not [sic] outboard motor(s) or 

watercraft otherwise excluded under this 

policy for which coverage is desired. 

Exception, if any, to (1), (b), (c), (d) or (e) 

entered in Special Provisions section on 

Declarations. Absence of an entry means “no 

exceptions.”

3. Procedural Background

After State Auto denied their claim for damage to the 

house, the Schuchmans filed suit in the Circuit Court of 

Marion County, Illinois. Their complaint set forth three 

counts. Count I was an action for a declaratory judgment, 

asking the court to declare that the plaintiffs were entitled to 

coverage for the repair and replacement of the 109 West 14th 

Street house. Count II was an action for damages, alleging 

that State Auto was in breach of the insurance policy and 

seeking punitive damages. Count III sought damages from 

State Auto pursuant to Section 155 of the Illinois Insurance 

Code, 215 ILCS 5/155.

State Auto removed the action to the United States 

District Court for the Southern District of Illinois, pursuant 

to the court’s diversity jurisdiction under 28 U.S.C. § 1332(a). 

The parties filed cross-motions for summary judgment, and 

on July 3, 2012, the district court entered summary judgment 

in favor of State Auto on all counts and denied the 

Schuchmans’ motion for summary judgment. The 
8 No. 12-2751

Schuchmans then timely filed this appeal, seeking reversal of 

the district court’s grant of summary judgment to State 

Auto.

II. Analysis

We review de novo the district court’s grant of summary 

judgment and construction of the insurance policy. Grinnell 

Mut. Reinsurance Co. v. Haight, 697 F.3d 582, 585 (7th Cir. 

2012) (citing Auto-Owners Ins. Co. v. Munroe, 614 F.3d 322, 

324 (7th Cir. 2010)). The parties agree that Illinois law 

governs the interpretation of the policy. As such, “[i]n 

construing the policy, our primary objective is to ascertain 

and give effect to the parties’ intentions as expressed by the 

words of the policy.” Id. (citing Rich v. Principle Life Ins. Co., 

226 Ill. 2d 359, 371, 875 N.E.2d 1082, 1090 (2007)). Like any 

contract under Illinois law, “an insurance policy is construed 

according to the plain and ordinary meaning of its 

unambiguous terms.” Auto-Owners Ins. Co., 614 F.3d at 324 

(citing Nicor, Inc. v. Associated Elec. & Gas, 223 Ill. 2d 407, 416, 

860 N.E.2d 280, 286 (2006)). We conclude, however, that the 

principal term at issue here—“residence premises”—is 

ambiguous.

This case turns on whether the Schuchmans resided on 

the “residence premises” at the time of the fire. The parties 

agree that the Schuchmans had to reside on the “residence 

premises” in order for coverage under the policy to be 

effective. They also agree that the Schuchmans were not 

residing at the 109 West 14th Street house at the time of the 

fire, but at the 1408 Madison Avenue mobile homes. The 

critical question, then, is whether “residence premises,” as 

defined by the policy, encompasses those mobile homes. If 

“residence premises” includes the mobile homes, the 
No. 12-2751 9

Schuchmans were residing on the “residence premises” at 

the time of the fire, and the damage to the house is covered 

by the policy. If “residence premises” excludes the mobile 

homes, however, the Schuchmans were not only residing 

somewhere other than the “residence premises,” but also 

maintaining a residence other than at the “residence 

premises” in violation of the Special Provisions. In that case, 

the policy would not cover the fire damage to the house.

The policy defines “residence premises” as the dwelling 

where you reside (whether single family or multi-unit) or 

“that part of any other building where you reside ... and 

which is shown as the ‘residence premises’ in the 

Declarations.” It also includes “other structures and grounds 

at that location.” Apart from directing us to the policy 

Declarations, this definition tells us that “the residence 

premises” is not a building, but a “location” on which there 

may be multiple buildings, and that the insured may 

“reside” in any such building that is included within the 

“residence premises” shown in the policy Declarations.

Turning to the Declarations page, we learn that the 

“premises” covered by the policy is located at “109 West 

14th Street, Junction City, Illinois.” But the Declarations page 

does not define the boundaries of that address. The 

subsequent description of the insured structure as a frame 

construction single-family residence confirms that the house 

associated with that mailing address is the covered dwelling.

But because we know (from the policy definition) that 

“residence premises” includes “other structures and 

grounds at that location,” we know that “residence 

premises” is not limited to that house. We can therefore 

conclude that the “residence premises” consists of the 
10 No. 12-2751

insured frame construction single-family house and any 

other structures and grounds located at 109 West 14th Street.

So what other structures and grounds, if any, were

within the location defined by “109 West 14th Street”? The 

Schuchmans contend that the address comprises the entirety 

of the single undivided and contiguous plot of land that Ms.

Schuchman purchased in 1980, and so includes the mobile 

homes. State Auto maintains, and the district court agreed, 

that the mobile homes could not have been located on the 

premises of 109 West 14th Street because they had a different 

mailing address—namely, 1408 Madison Avenue. 

If the mailing address in the policy defined a single 

building, it would be hard to quarrel with State Auto’s logic. 

But as we have already seen, the mailing address “109 West 

14th Street,” as used in the policy, was intended to define a 

location, not an individual building. And there’s the rub. The 

implicit premise of the insurer’s argument is that the 

location—that is, the area of land—defined by one mailing 

address cannot include within it a structure that has another 

mailing address. It offers no authority for the proposition, 

however, and the validity of the premise is not self-evident.

Consider office and apartment buildings, for example. They

bear street addresses comprising the entire building but 

comprise distinct offices and apartments that frequently bear 

individual addresses. Indeed, the policy appears to have 

expressly contemplated the possibility of multiple addresses

on the residence premises, in that it was written to cover 

either a single or multi-unit dwelling. The Schuchmans 

could have converted the house into separate apartments 

with distinct addresses (e.g., 109-A, 109-B, and 109-C) 
No. 12-2751 11

without compromising their policy coverage,1 so it is 

difficult to understand why moving into a mobile home near 

the house would do so.

State Auto concedes that “Plaintiff may have an 

argument if the 1408 Madison address had been a part of the 

109 West 14th Street lot in September 2000, when the policy 

was issued.” Resp. Br. at 17. But, it insists, by that time 109 

West 14th Street and 1408 Madison Avenue “were two 

distinct properties.” That assertion is difficult to square with 

the fact (undisputed by State Auto) that a title search for 

either address—109 West 14th Street or 1408 Madison 

Avenue—returns the entire contiguous tract of land owned 

by the Schuchmans. So far as the record reveals, both 

mailing addresses, while assigned to specific structures on 

the property, still refer to the same “grounds” or “location”; 

the assignment of multiple postal addresses to structures on 

the property did not, and could not, divide the parcel into 

separate lots as State Auto maintains.

Not surprisingly, then, State Auto doesn’t tell us where 

the grounds associated with “109 West 14th Street” end, and 

those associated with 1408 Madison Avenue begin. It can’t.

The insurer has created a circular ambiguity by using a 

mailing address for a purpose it was never intended to 

serve—namely, for defining the metes and bounds of a piece 

of property. Here is what the policy tells us: (1) the 

“residence premises” is located at 109 West 14th Street; (2) 

109 West 14th Street is the “residence premises.”

 

1 We ignore as irrelevant to this point any complications that rental or 

commercial use of the property might introduce to the question of 

coverage under the policy.
12 No. 12-2751

As this case illustrates, a mailing address is ill-suited to 

the role of defining property lines. Consider two neighbors 

who have mailing addresses of 101 and 103 Oak Street, 

respectively. The postal carrier knows at which structure to 

leave mail using these respective addresses, but standing 

alone, those addresses would not tell a utility worker 

through what property to run a new line when responding 

to a service request at one of the homes. Perhaps there 

would be a fence around the perimeter of the property, or a 

survey of the lot on which the house is located, or other 

information that would reveal the boundaries of the 

respective properties, but the point is that the mailing

address alone would not provide sufficient guidance. It does 

not suffice here, either.

State Auto also contends that because the policy 

distinctly identifies the insured premises as a “frame” 

construction dwelling at 109 West 14th Street, the policy 

cannot reasonably be interpreted to include mobile homes 

with a different mailing address. This argument misses the 

mark entirely. There is no question that the insured dwelling 

was the house bearing the mailing address 109 West 14th 

Street; that was, as reflected on the Declarations page, a 

frame-construction, single-family home. This is not a dispute 

about whether there was coverage under the policy for the 

mobile homes in which the Schuchmans were living; the 

issue here is not the identity of the insured dwelling but 

whether the Schuchmans were residing elsewhere on the 

“residence premises,” which is a condition to the policy’s 

coverage of the house.

State Auto’s misplaced reliance on Howard Foundry Co. v. 

Hartford Fire Ins. Co., 222 F.2d 767 (7th Cir. 1955) serves only 
No. 12-2751 13

to highlight the reason that the policy in this case is 

ambiguous. In Howard Foundry, the “core question” before 

the court was “whether plaintiff was insured against the loss 

of structures in Section 22 [Twp. 45 N. Range 8, E. 3rd P.M., 

situated on the “Schaefer-Bohr” farm],” even though the 

insurance policy at issue described the insured premises 

only as the “acreage and buildings ... located in Section 15 

[Twp. 48, N.R. 8 East of the 3rd P.M., situated on the 

“Justen” farm].” Id. at 769. Buildings situated in Section 22 

had been damaged by fire, while the structures in Section 15 

had not. But because acreage of the Schaefer-Bohr and Justen 

farms extended into both Sections 15 and 22, the plaintiff 

argued that the Hartford policy “sufficiently identified the 

Schaefer-Bohr farm, so that buildings situated on it were 

covered when the loss occurred.” Id. The Seventh Circuit

concluded, however, that the plaintiff’s argument would 

require the court to “ignore the clear recital of acreage and 

section number in the policy.” Id. at 770. Unlike the State 

Auto policy at issue here, the policy in Howard Foundry 

clearly and unambiguously identified the insured premises

with a legal description of its boundaries, rather than a 

mailing address that did not. Had the State Auto policy 

defined the premises by reference to a specific lot, as in 

Howard Foundry, this ambiguity could have been avoided.

The policy language here is more akin to that considered 

by the Illinois Appellate Court in General Casualty Co. of 

Illinois v. Olsen, 372 N.E.2d 846 (2d Dist. 1977). There, the 

court confronted a policy definition of the term “residence 

premises” that, like the definition in State Auto’s policy, did 

not use a legal description of the property covered that 

clearly described the metes and bounds of the residence 

premises. Consequently, when required to consider whether 
14 No. 12-2751

an accident had occurred “away from” the residence 

premises, the court found the term ambiguous and 

construed the term in favor of coverage. Id. at 850. State 

Auto’s attempt to distinguish Olsen by arguing that the 

description of the residence premises there was less specific 

than in this case is entirely unconvincing; in both cases, the 

critical ambiguity arose from the policy’s failure to delineate 

clearly the boundaries of the residence premises and to rely 

instead on an ambiguous reference to the “grounds” 

surrounding a specific house.

We conclude, then, that the meaning of “residence 

premises” is ambiguous. As a fallback position, State Auto 

argues that any textual ambiguity as to the meaning of that 

term can be clarified by reference to evidence of “the intent 

of the parties ... with due regard to the risk undertaken, the 

subject matter that is insured, and the purposes of the entire 

contract.” Indiana Ins. Co. v. Pana Comm. Unit School Dist. No. 

8, 314 F.3d 895, 900 (7th Cir. 2002). And while it is true that 

ambiguous language in an insurance contract is construed 

against the insurer, that rule applies “only if the language of 

the policy is ambiguous after application of other principles 

or canons of interpretation ... and only if the ambiguity 

cannot otherwise be resolved. In other words, the rule of 

liberal construction in favor of the insured is a rule of last 

resort which must not be permitted to frustrate the intention 

the parties have expressed, if that can otherwise be 

ascertained." 16 WILLISTON ON CONTRACTS 49:16 (4th ed.); see 

also, e.g., CAN Casualty of California v. E.C. Fackler, Inc., 836 

N.E.2d 732, 736 (Ill. App. Ct. 2005) (if court finds ambiguity 

in insurance contract, “we may consider parol evidence to 

resolve the ambiguity. Any unresolved ambiguity will be 

construed against the insurer.”).
No. 12-2751 15

Unfortunately for State Auto, resort to parol evidence 

concerning the parties’ intentions confirms, rather than 

resolves, the ambiguity in the meaning of “residence 

premises” under the policy. For starters, when the 

Schuchmans first applied for homeowner’s insurance with 

State Auto, they used 1408 Madison Avenue as their mailing 

address, even though they did not at that time reside in the 

trailer to which that address had been assigned, suggesting 

that they did not view that address as defining a distinct 

piece of property. State Auto counters the Schuchmans 

indicated on their application that the 109 West 14th Street 

house would be owner-occupied and that they did not own, 

occupy, or rent any other residence; therefore, the insurer 

argues, it was clearly the intent of the parties that State Auto 

would only cover the occupied dwelling at 109 West 14th 

Street. But—again—the question is not which dwelling was 

covered by the policy, but whether the assignment of a 

distinct mailing address to the mobile homes on the 

property placed them outside the boundaries of the 

“residence premises.” And it would have made little sense 

for the Schuchmans to list a separate mailing address while 

also indicating that they did not own another residence, 

unless they considered both mailing addresses to be 

assigned to a single property.

Further, when the Schuchmans moved out of the 109 

West 14th Street house and into the 1408 Madison Avenue 

mobile homes, Mr. Wethington, their insurance broker, 

informed the Schuchmans that so long as they resided on the 

“property,” the house at 109 West 14th Street would be 

covered under the State Auto policy. In devoting almost 

three pages of their brief to establishing that Wethington 

was not its agent, State Auto misapprehends the import of 
16 No. 12-2751

this evidence: Wethington’s statements are not significant 

because they bind State Auto, but because they show that 

the Schuchmans understood the residence premises to 

include the entire contiguous parcel. What is more, they 

highlight the term’s susceptibility to more than one 

reasonable interpretation; Wethington, an experienced 

insurance broker, viewed the policy’s residence requirement 

in the same way that the Schuchmans did.

State Auto counters that, because the Schuchmans were 

specifically informed by Mr. Wethington that they would 

need to take out a separate policy to insure the 1408 Madison 

Avenue mobile homes, it would have been unreasonable for 

the Schuchmans to assume that State Auto intended the 1408 

Madison Avenue mobile homes to be part of the “residence 

premises.” This argument falls short for several reasons. 

First, Wethington explained to the Schuchmans that the 

mobile homes needed a separate policy not because they 

were not part of the residence premises but because State 

Auto does not insure mobile homes. Second, and relatedly, 

State Auto again confuses the issues of coverage under the 

policy and residency. The Schuchmans do not argue that the 

mobile homes are covered by the policy; their argument is 

that when they moved to the mobile homes, they continued

to reside in structures within the insured “residence 

premises” and therefore the coverage they purchased and 

paid premiums on for a decade remained in force.

Which brings us to the most telling evidence of the 

Schuchmans’ understanding of the policy: they continued to 

pay premiums on the policy for some six years after they 

moved out of the house and into the mobile homes parked 

nearby. To hear State Auto tell it, the Schuchmans were 
No. 12-2751 17

throwing their money down the drain by doing so, but we 

doubt very much that was the Schuchmans’ understanding. 

We don’t agree with the Schuchmans’ argument that State 

Auto had affirmative duties to investigate their residency on 

the premises in view of their use of a different mailing 

address, but whatever State Auto’s knowledge or 

understanding of the Schuchmans’ residency and the policy 

language, it is clear that it never gave the Schuchmans any 

inkling that the existence of other mailing addresses on the 

property had any potential to compromise their coverage of 

the house under the policy. It is plain that the Schuchmans 

always viewed the property as a single unit. That view was 

not unreasonable—indeed, it is consistent with the legal 

specifications defining the property. And there is no 

countervailing evidence to suggest that State Auto ever 

regarded the property as separate parcels.

As its last hurrah, State Auto argues that construing the 

policy to provide coverage would “lead to absurd results” 

by allowing property owners to subdivide their property but 

insure it in its entirety through a single policy. The short 

answer to this unlikely scenario is that State Auto and other 

insurers can easily prevent it simply by defining the insured 

premises with adequate precision. That should not be 

difficult; legal descriptions of properties are readily 

available. Moreover, a legal description is not required; the 

policy merely needs to define the boundaries of the premises 

by terms that can be readily understood and applied. 

Defining the “residence premises” solely by reference to a 

postal address where the insured dwelling sits on an 

undivided parcel of land that has multiple postal addresses 

associated with it, however, falls short of this mark.
18 No. 12-2751

“[T]he insurer has the capacity to draft intelligible 

contracts.” Gillen v. State Farm Mutual Auto Ins. Co., 830 

N.E.2d 575, 583 (Ill. 2005). With respect to the “residence 

premises,” State Auto failed to do so and none of the 

evidence they point to resolves the ambiguity inherent in 

using a mailing address to define the boundaries of a piece 

of property. “Where ambiguity ... exist[s], the policy will be 

construed strictly against the insurer, who drafted the 

policy,” Nicor, Inc., 223 Ill. 2d at 417, 860 N.E.2d at 286 (citing 

Travelers Insurance Co. v. Eljer Manufacturing, Inc., 197 Ill. 2d 

278, 293, 757 N.E.2d 481, 491 (2001)), “and liberally in favor 

of coverage for the insured.” Id. (citing Hobbs v. Hartford 

Insurance Co. of the Midwest, 214 Ill. 2d 11, 17, 823 N.E.2d 561, 

564 (2005)). Accordingly, pursuant to Illinois law, we 

liberally construe the term “residence premises” in favor of 

the insureds to encompass the 1408 Madison Avenue homes 

in which the Schuchmans were residing at the time of the 

fire.

Further, because “residence premises” is susceptible to 

more than one reasonable interpretation, Auto-Owners Ins. 

Co., 614 F.3d at 324 (citing Nicor, Inc., 223 Ill.2d at 416, 860 

N.E.2d at 286), the Schuchmans cannot have violated the 

Special Provisions of the policy by residing in the 1408 

Madison Avenue mobile homes. Subsection (c) of the Special 

Provisions expressly refers to “residence premises,” which 

construed liberally in favor of the insureds, encompasses the 

mobile homes in which the Schuchmans were residing. 

Therefore, because “residence premises” includes the 1408 

Madison Avenue mobile homes, the Schuchmans were not 

maintaining a residence other than at the “residence 

premises” and were not violating the Special Provisions.
No. 12-2751 19

Therefore, the Schuchmans are entitled to coverage for 

the fire damage to the 109 West 14th Street house that 

occurred on May 23, 2010 under the State Auto policy at 

issue.

III. Conclusion

For the foregoing reasons, we reverse the grant of 

summary judgment in State Auto’s favor. We remand the 

case to the District Court for entry of judgment in the 

Schuchmans’ favor on Count I and for further proceedings 

consistent with this opinion with respect to the remaining 

counts.