Recently I was asked by a Texas insured whether his insurance carrier could deny his claim based on “unoccupied property” language in the policy. This prompted me to take a closer look at Texas case law on the issue.
The Supreme Court in Blaylock v. American Guarantee Bank Liability Insurance Company,1 defined the term “occupied”:
A house is “occupied” when human beings habitually live in it as a place of abode; a house is unoccupied when it ceases to be used for living purposes or as a customary place of human habitation.
In my situation, the term “unoccupied” is defined in the policy, and generally references a property in which no one lives as their primary or secondary residence. The issue of two residences was discussed in Farmer’s Mutual Protective Association of Texas v. Wright,2 in which the carrier contended that only one of two houses can be “occupied” as the insured’s customary place of habitation and abode. The Court disagreed, relying upon the rationale of the Supreme Court in East Texas Fire Insurance Company v. Kempner:3
[I]n ascertaining the meaning of the words “vacant and unoccupied,” they should not be taken in a technical and narrow sense, but should be taken in their ordinary sense, as commonly used and understood, and, if the sense in which they are used is uncertain, they should be construed more favorably to the insured.
The Court in Wright further reasoned that evidence supported that the house was occupied because:
- The insured went to the property daily to check on and feed cattle;
- The insured frequently took naps at the property;
- The property’s yard was mowed twice a month;
- The property was furnished; and
- The property retained all utilities except electricity up to the time of the fire.
Ultimately, whether a property is occupied will turn on the specific facts found in each case and is a question of fact for the jury or fact finder.