The insurer has denied this claim based on the vacancy clause in the policy. That provision states that there is no coverage for theft if the dwelling has been vacant for more than thirty consecutive days immediately before the loss. However, a building under construction is not considered “vacant.” Our insured says that the tenant had some belongings in the property, but had not physically lived there prior to the time of the loss.

We believe that the vacancy clause would not apply because the building was being remodeled for a month or more and occupied daily by the workers doing the remodeling.

Wisconsin Subscriber

A

The policy contains two exclusions that can be considered in this situation. One excludes “theft…to a dwelling…under construction.” If the dwelling was under construction at the time of loss, there would be no coverage for the loss you described. However, we believe that the dwelling in this case should not be considered as “under construction”; the more proper description of the work on the building is a “renovation”. There is a clear distinction between “construction” and “renovation” in that the former term indicates forming or making something into a whole by combining or arranging parts, while the latter term means restoring an existing thing to a better state. Besides, renovation is not viewed as construction by adjusters—for example, see Building and Personal Property Coverage Form. So we do not believe that this particular exclusion is applicable in this case.

The second exclusion to be considered is the one on which the insurer has based its denial. It provides that there is no coverage for “vandalism and malicious mischief, theft or attempted theft if the dwelling has been vacant” for more than the 30-day period you noted. The key point here is whether the building is to be considered as vacant. Since the insured's tenant had some belongings (presumably items of value to the tenant) in the dwelling at the time of the loss, the dwelling was not vacant. Courts have long defined “vacant” in insurance policies as meaning empty of inanimate objects (as opposed to “unoccupied” which they have defined as being devoid of human habitation). An example of a case using these definitions is Myers v. Merrimack Mut. Fire Ins. Co., 788 F.2d 468 (1986). And, see The Standard Fire Insurance Policy. Therefore, this exclusion would not be applicable.

We believe that the insurer should reconsider its decision.