Leave or occupancy in insurance is often not recognized by the insured until they suffer some form of loss and it is denied by the insurance company. This type of livelihood is the source of frequent disputes.
Many home insurance policies have a provision that excludes all coverage if a building is vacant for a certain period of time. Often, these policies will have their own definition of vacancy, which may vary from the definition we are all used to. There will usually be a time frame of 30-60 days for the deposit to be effective. Most of the regulations will say something about the property being without tools or content inside the home. If it is not defined, which is also probable, policyholders must look at the usual dictionary meaning of the word. Even if the loss is covered, this provision can still reduce the amount that a homeowner can get back by 1
Insurance companies rely on this provision because a vacant or vacant home increases the potential for loss in their eyes. A vacant property is at higher risk of loss from hazards such as fire, vandalism, theft, water from leaking or broken pipes, mold and weather-related damage, as no one is present to take care of the home. Damage to unoccupied or vacant homes can not be detected for long periods, which increases the damage.
Most Texas courts have held that the term "vacancy" is not an ambiguous term when not defined. They have also granted the vacancy provision all the way up to the Texas Supreme Court in Greene v. Farmers Insurance Exchange . 1 In its decision, the court found that when the homeowner left the home and no longer lived there, full coverage remained in place for 60 days after the holiday, after which there was no coverage for the home.
It is very important to examine the vacancy wording in a particular policy. There are many situations that can trigger this provision. An individual may have moved into a new home while the previous home is for sale, someone may have a vacation home that they do not use for extended periods, or a homeowner may rent the home and the tenants move, these are just a few examples of what insurance companies will lean towards to deny coverage. Keep in mind that insurance companies do not consider housing "under construction" to be vacant. 2 However, there is a certain measure, there is an approval of a vacancy that will cancel the exclusion of vacancy. Unfortunately, this will require an extra premium.
It is always important to review your insurance before there is a loss. If you have experienced a loss and fear that the home may have been vacant by definition, it is important to hire an experienced real estate insurance lawyer to help you with your claim.
1 Greene v. Farmers Ins. Exch. 446 S.W.3d 761, 2014 WL 4252271 (Tex. 29 August 2014).
2 Columbia Lloyds Ins. Co v. Mao 2011 WL 1103814 (Tex. App. Fort Worth, March 24, 2011 no pet.).