“SECTION I – PERILS INSURED AGAINST

A. Coverage A – Dwelling And Coverage B – Other Structures

2. We do not insure, however, for loss:

(3) Theft in or to a dwelling under construction, or of materials and supplies for use in the construction until the dwelling is finished and occupied;”

The carrier's position is that since the dwelling was never occupied the claim is not covered, even though they still underwrote the policy. So our first question pertains to this decision. Is this correct? Second, does the above finished and occupied language pertain to the dwelling, materials, and supplies? It reads like it only pertains to materials and supplies.

Virginia Subscriber

The carrier is correct; the loss is not covered because the home was never occupied. The insurer probably covered the property based on the fact that it was to be occupied shortly after completion and not left vacant for two years. The language states that “theft in or to a dwelling under construction, OR (emphasis added) of materials and supplies…” therefore both theft of items from the dwelling itself, or of materials or supplies for the dwelling, are excluded. The carrier may refund the premium since it collected the premium for two years, but the terms of the policy were never fulfilled.