Many renter’s insurance policies have a provision that excludes all coverage if a building is vacant for a certain amount of time. Unfortunately, many of those same policies fail to define “vacant” or ‘vacancy.” What does that lead to? If you guessed litigation, you’re absolutely right.

In Columbia Lloyds Ins. Co. v. Mao, 2011WL1103814 (Tex.App.—Fort Worth, Mar. 24, 2011, no pet.), Columbia Lloyds appealed the trial court’s order granting summary judgment in favor of the insured, specifically, it’s finding that the building was not vacant. At the trial court level, the evidence showed that a fire damaged the insured’s property on or about October 28, 2006, and was first reported to the insurer on November 7, 2006. Additionally, the evidence showed that at the time of the fire, the insured stated on several occasions that the property was vacant, and that the last tenant had moved out by June 8, 2006. However, the insured also noted that the property was being remodeled and the contractor had finished the job around 45 days prior to the fire.

Because the policy did not define “vacant” or “vacancy”, the appellate court turned to the case law for a definition. “The term vacant has been defined by case law as an entire abandonment, deprived of contents, empty, that is, without contents of substantial utility.” (internal citations and quotations omitted). In addition to the evidence discussed above, the appellate court also considered the following evidence: the fact that no one lived in the dwelling; the insurer’s adjuster’s photos of the dwelling after the fire showing no contents inside the dwelling; and the remodeler’s proposal that the work would be completed by July 12, 2006.

Viewing all of the summary judgment evidence in the light most favorable to Columbia Lloyds, the nonmovant on the [insured’s] traditional motion for summary judgment on their breach of contract claim that was granted, a genuine issue of material fact exists concerning whether the dwelling was not vacant for sixty consecutive days prior to the fire. Based on [the facts] … a reasonable and fair-minded person could conclude that the dwelling was … without contents of substantial utility for more than sixty days prior to the October 28, 2006 fire. [internal citation omitted]

The Court held that “reasonable and fair-minded people could differ in their conclusions on whether the dwelling was not vacant for sixty consecutive days prior to the fire,” so that summary judgment was not proper.