The Defendant Insurer was entitled to rely on an exclusion clause which excluded from coverage property damage occurring after the subject premises had been vacant for more than 30 consecutive days. The extended vacancy also constituted a material change in the risk assumed by the Insurer of which they ought to have received notice.
Wright v. Capri Insurance Services Ltd.,  B.C.J. No. 383, British Columbia Supreme Court
The Plaintiff Insured brought an action to recover under a policy of insurance with respect to damage to rental premises caused by a fire in September 1999. The Insurer admitted that there was a valid policy of insurance at the time of the fire, but asserted that there was no coverage since the premises had, to the Insured’s knowledge, been vacant for a period of more than 30 consecutive days before the loss, or in the alternative, that the premises were unoccupied, again to the Insured’s knowledge and that constituted a material change in the risk which had not been reported to the Insurer.
The Court held that the question of whether or not premises were “vacant” was to be determined by having regard to all of the circumstances, not solely by a reference to the presence or absence of inanimate objects in the premises, as asserted by the Insured.
The Court found that the Insured was aware that the premises had been vacated by the tenants in early July 1999. This conclusion was based upon the intention of the tenants, the removal by them of the vast majority of their personal property, the abandonment of two items left behind in the premises and the fact that they communicated their intention to vacate the premises to the Insured. The Court found that there was no requirement that the tenants provide written notice of their intention to vacate and that the Insured knew that the tenants had moved out, even though the tenants did not return the keys as promised. The Court therefore held that the Insurer was entitled to rely upon the “vacancy” exclusion to deny coverage.
The Court also held that while short periods of vacancies are to be expected with rental premises, a material change in the risk occurred upon the Insured failing to take any steps to secure other tenants by the beginning of August 1999. At that point, the policy became void as the Insured took no steps to advise the Insurer of the continuing vacancy.
The Plaintiff’s action was dismissed.
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