Claims Queue b Y CHriStiNe G. bArLo W, CpCU
POLICY DEFINITIONS OF
VACANCY AND OCCUPANCY
Is a Dwelling Vacant or Simply Unoccupied?
the dwelling was not vacant; rather, it
was unoccupied. Couch on Insurance 3rd
edition concurs, and it states in 94:134
that vacant means entirely empty; if belongings of sufficient value are present to
make it reasonable to believe that the insured has not abandoned them, a dwelling is simply unoccupied and not vacant.
This raises the issue of exactly how
much personal property must be left in
the dwelling in order for it to be simply
unoccupied and not vacant. Do a sofa,
a chair, and a few books make a dwelling unoccupied instead of vacant? This
is where the situation gets complicated.
Working from Couch, it makes sense that
in order for a home to be simply unoccupied, there must be sufficient items left
in the house for it to be functional as a
dwelling. Therefore the sofa, books, and
chair are not enough to make the home
habitable. If there were a microwave,
toaster oven, or mini refrigerator, then
that would be a different situation. Cooking appliances along with basic furniture
such as a bed or even a sofa could move
the property from vacant to simply unoccupied. The ability of the house to be
functional as a dwelling is critically important in the determination of whether
the house is vacant or unoccupied.
Vacancy is one of those things that generally does not receive a lot of consid- eration until something happens. With the mortgage crisis, one hears about many vacant houses. There are also vacant lots that communities take over to grow gardens or establish as playgrounds for the local residents.
While at first glance whether a property is vacant would seem to be obvious, it is
unfortunately not nearly as easy to determine as one would hope. In homeowners’ and
dwelling forms, damage to a property caused by vandalism or burglary is excluded if
the property has been vacant for more than
60 consecutive days immediately before
the loss. It bears mention that some older
forms use 30 days, so be sure to check your
specific policy language.
Vacancy is not a defined term in the
policy. Therefore, as per court practices, a
standard desk reference is used to determine the meaning of the word. According
to Merriam Webster Online, vacant is “when something is without content or occupant.”
Note the fact that the property must be without content. A dwelling with furniture but no
occupant is not considered vacant; it is unoccupied. This is a big difference.
Many people incorrectly
assume that renovation
materials are used.
Let’s examine a hypothetical scenario: An insured leaves his home to go on a world
tour for six months, thereby leaving his belongings within the dwelling. The dwelling is
then vandalized while the insured is away. In this case, the property is covered because
Under Construction vs.
The policy also states that a home under construction is not considered to be
vacant. Similar to vacancy, this seems
straightforward until you get into the details. A brand-new house being built is
easy: It is new, did not exist before, and
contractors are building the structure
from the ground up. Property vandalized
under these conditions is covered, because, per policy language, the property
is not vacant since it is under construction. However, this becomes confusing
when the insured begins to renovate the
Many people incorrectly assume that
renovation equals construction because