Homeowners insureds left their home in South Dakota, placing it on the market for sale, after having accepted new employment opportunities in California. They departed with a U-Haul trailer, in which they placed their personal property that was removed from the home, and arrived at a motel in the destination city where the new employer had arranged accommodations until they could make living arrangements of their own.

The trailer and its entire contents were stolen from the motel parking lot two days after the insureds arrived there. The insureds made claim for the undisputed loss of their personal property, asking the full amount of the Coverage C limit, as the value of the property was in excess of the limit. The insurer, instead, offered 10% of the Coverage C limit. The insureds refused and filed a lawsuit to recover the full Coverage C limit. The trial court reasoned that the insureds, by virtue of "while away from the insured premises" insuring provisions, were entitled to only 10% of the Coverage C limit. The insureds appealed.

The appeal court cited "change of location" provisions in the policy as follows, pertinent to when insureds moved to another location where they intended to permanently reside: "The Coverage C limit applies pro rata at each location for 30 days from the date you begin to move. . . .; property in transit is covered against direct loss from perils insureds against for an amount up to 10% of the Coverage C limit of property or $2,500, whichever is more." (The latter limit is identical to that "while away from the insured premises.")

The insured argued that the term "location" was ambiguous and should be construed in their favor. They contended that it could refer to a city or metropolitan area as well as a specific dwelling. Accordingly, they asked the court to construe the word to mean a city or metropolitan area.

The appeal court concluded that the term referred to a specific residence "such as that of a house, apartment or mobile home." It reached the conclusion by reference to the "insured premises" definition in the policy, in which it was stated that ". . . . if you own the one to four family house described in the Declarations, the insured premises mean that house, related private structures, and grounds at that LOCATION. . . ." The court found it clear that "location" meant a specific residence rather than a city or metropolitan area. Accordingly, the insureds were entitled to only 10% of the Coverage C policy limit.

The judgment of the trial court was affirmed in favor of the insurance company and against the insureds.

(PROKOP ET UX., Plaintiffs, Appellants v. NORTH STAR MUTUAL INSURANCE COMPANY, Defendant, Appellee. South Dakota Supreme Court. No.16824-a-GWW. June 20, 1990. CCH 1990 Fire and Casualty Cases, Paragraph 2609.)