Dallas Fort Worth Insurance Lawyer Blog
A common reason for claim denial is when a home is not being lived in at the time of the loss. The reason for denial will be denied due to an exclusion in most policies excluding coverage for structures that are vacant or unoccupied. A February 2025 opinion from the United States Fifth Circuit discusses this issue. The opinion is styled, Crystal Childers; Bradley Childers v. Allstate Indemnity Company.
This is a summary judgment opinion.
The Childers had coverage on their home through Allstate and later purchased another home and had it insured by a “Landlords Package Policy.” This policy had exclusions for when a structure was vacant or unoccupied for more than 60 consecutive days immediately prior to the loss.
After acquiring the property the Childers began repairing the property and doing renovations. Nobody was living at the property when the loss, due to burglary and vandalism, occurred. Allstate denied the claim citing the exclusions.
The Childerses argue that the Lufkin property was neither “vacant” nor “unoccupied” for over 60 days, calling it their “secondary residence.” They posit that Texas election law defines “residence” and must guide the Policy’s meaning. According to them, Texas election law permits a person to have multiple residences. They further assert that the Policy does not define the terms “residence” and “reside,” rendering the Policy ambiguous. This purported ambiguity would have us construe the Policy in their favor. Their argument, however, is unpersuasive.
Under Texas law, to prevail on a breach of insurance contract claim, the insured must prove (1) a valid contract; (2) performance or tendered performance by the insured; (3) breach by the insurer; and (4) damages caused by the breach. The insured must also show that the policy covers her claims.
Texas law treats an insurance policy like any other contract, applying general rules of construction. Interpreting an insurance policy is a question of law. Ambiguities are interpreted in favor of coverage for the insured. Whether a policy is ambiguous is also a legal issue under Texas law. We presume that the parties intended what the text says, and we give terms their plain meaning unless the policy indicates otherwise. Clear and definite language is unambiguous as a matter of law.
The Policy here does not cover the Childerses’ loss. It excludes coverage for theft, burglary, or vandalism if the property is “vacant or unoccupied for more than 60 consecutive days immediately prior to the loss.” Here, “vacant” and “unoccupied” must be understood in their ordinary sense, not narrowly or technically.
“Vacant” and “unoccupied” are distinct. Under Texas law, vacant means without inanimate objects. A house is occupied when human beings habitually live in it as a place of abode. Conversely, a house is unoccupied when it ceases to be used for living purposes or as a customary place of human habitation.
Here, the Lufkin property was not vacant as it held furniture— vanities, dressers, and mirrors.
On occupancy, the Childerses misapply Texas law, conflating “vacant” with “unoccupied.” For example, they insist that the furniture at the Lufkin property creates a genuine dispute of material fact on whether the home was unoccupied. This point misses the mark. “Unoccupied” means that a home “ceases to be used for living purposes or as a customary place of human habitation.” For this inquiry, whether the home is furnished is of no consequence. Moreover, Crystal testified that no one lived at this property, no one ever had, and no one rented this property. No genuine dispute of material fact exists. According to Crystal’s deposition, the Lufkin property was unoccupied for at least 60 days before the loss.
Further, the Policy is not ambiguous. It defines “residence premises” as “your dwelling, other structures and land located at the address stated on the Policy Declarations.” This definition addresses the insured property, not the insured’s place of residence. This is, after all, a “Landlords Package Policy,” implying that the Childerses do not live at the property.
Finally, nothing in the Policy links “residence premises” to whether a home is “vacant” or “unoccupied. More critically, the Childerses’ theory contradicts Texas Supreme Court precedent. Their theory urges this court to redefine “unoccupied,” contradict existing law, and ignores the law of the state’s highest court. We lack that power. On these grounds, we hold that there is “no genuine dispute as to any material fact” on whether the Lufkin property was vacant or unoccupied. Thus, we conclude that the district court did not err in granting summary judgment for Allstate.