While this blog has briefly addressed the relevance of prolonged periods of vacancy on a homeowner’s insurance claim, this article focuses specifically on the impact of the vacancy exclusion on a fire damage claim. When a home is obviously devoid of furniture or other signs of life, such as lights turned on, the risk of damage caused by malicious acts are greater. Consequently, most policies deny coverage if a home is left vacant for a prolonged period. A recent decision from a California court offers potential guidance for policyholders forced to file claims related to unintentional damage during a period of vacancy. Part I of this blog post focuses on outlining the majority’s decision while Part II reviews the dissent and important lessons for policyholders.
In Hung Van Ong v. Fire Ins. Exchange, the policyholder filed a fire damage claim after the covered residence burned down. The property sat vacant for more than thirty days immediately prior to the fire. The insurance company investigator identified signs of habitation when inspecting the premises in the aftermath of the fire. The relative isolation of the home raised the possibility of the unauthorized presence of a vagrant. The insurance investigator speculated that a fire set to generate heat got out of control. The investigator specifically referenced holes assumed to be places where logs burned through the flooring as the vagrant attempted to kick the wood outside of the building.
The California appellate court that addressed this issue ultimately held that the policy exclusion related to vacancies exceeding thirty days did not preclude recovery for the fire damage. Based on the evidence discovered by the investigator, the insurance company concluded that the fire was caused by “vandalism.” According to the insurance carrier, a vagrant made unauthorized entry into the premises and intentionally started a fire on the floor of the kitchen.
Under the express terms of the policy, the vandalism and malicious mischief exclusion did not cover loss if the subject property was vacant for thirty consecutive days preceding the loss. However, the policy did not provide a definition for “vandalism” within the context of the policy. The court indicated that the ordinary meaning of the term referred to “willful and malicious destruction or defacement of public or private property.” The court further defined “malicious” as “having or showing a desire to cause harm to someone.”
While appellate courts in a number of other states have found that intentionally set fires fall within the vandalism portion of the vacancy exclusion, the judges found this case distinguishable. While the California fire like those in cases in other states was intentionally set, the other cases all involved the use of accelerants. The judges reasoned that the evidence suggesting the vagrant tried to kick the log out the door demonstrated an intent to extinguish the fire rather than to cause damage to the home.
Although the majority opinion acknowledged that the purpose of the exclusion was to protect the insurer from increased risks associated with a vacant property, the judges emphasized that the exclusion only covers risks within the scope of policy language. The court’s analysis of the terms and definitions within the policy found that the language was ambiguous with regard to whether fires that were not intended to do damage constituted “willful and malicious destruction.”
Our Miami bad faith insurance law firm invites you to contact us if you are having difficulties with your insurance company. Florida insurance claims lawyer J.P. Gonzalez-Sirgo handles claims against insurance companies in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.