Does Vacancy Preclude Coverage, Even If Not Related to Cause Of Loss?

Originally published by Phillip Sanov .

The Texas Supreme Court recently ruled that a vacancy clause remained enforceable by the insurance carrier to preclude coverage in a homeowner’s claim, even though the vacancy played no role in the cause of loss. In Greene v. Farmers Insurance Exchange,1 the Court found in favor of the insurance carrier with analysis that the case turned on the coverage purchased by the homeowner that Farmers had agreed to provide. The homeowner, the Court concluded, sought “to have [the Court] re-write the insurance policy under the guise of ‘construing’ it so Farmers provides coverage it did not agree to provide, and [the homeowner] receives coverage she did not contract for.”

Background Facts From The Lower Courts

A house in Irving, Texas, that had been vacant for several months was damaged when fire spread to it from a neighboring property. The house was insured under a homeowner’s insurance policy issued by Farmers Insurance Exchange containing a clause suspending…

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