Coverage for rental property excluded under vacancy exclusion despite insured living in a trailer beside the home while it was under renovation

10. January 2018 0

Coverage was excluded for a rental property under the vacancy exclusion despite the insured living in a trailer beside the home while it was under renovation.

Insurance law – Homeowner’s insurance – Exclusions – “Resident” – “Vacant” – Definition – Terms of policy

Taylor v. Co-operators General Insurance Co., [2017] A.J. No. 1232, 2017 ABQB 705, Alberta Court of Queen’s Bench, November 17, 2017, R.P. Belzil J.

The insurer brought an application for a determination as to whether it was obliged to indemnify the insured following a fire at the insured’s rental property.  The insured’s tenants moved out on July 13, 2015.  On July 22, 2015, the insured towed a trailer to the property and parked it adjacent to the home.  The insured intended to renovate the home in preparation for renting it for September 2015. He intended to live in the trailer on some days during the renovation project.  He used the washroom and stored tools in the home.  No food, clothing or other personal items were kept in the home.  The insured ran a power cord from the home to the trailer.  On August 22, 2015, the home was damaged by fire.  The insurer denied coverage on the basis that the home was vacant for more than 30 days.

The issue was whether, on the facts, the insured had taken up residence in the home.  The policy defined vacant in an old dwelling as “when all residents have moved out and another resident has not yet moved in”.  The Court looked to the dictionary definition of a “resident” and noted that it must refer to one who carries on the normal functions of occupancy, including food storage, cooking, eating, storage of personal items, sleeping and using the dwelling for leisure.  There was no evidence on the facts that the insured was carrying on the functions of a resident.  In the alternative, the insured argued that the trailer was an attached structure, such that the home should be considered occupied.  The Court noted that “structure” was not defined in the policy and nor was “trailer” found anywhere in the policy.  Based on the dictionary definitions of both, the Court found that a trailer was not a structure. Moreover, parking the trailer next to the home and running a power cord to the trailer did not make the trailer part of the home or convert it into a structure or a detached structure.  Accordingly, the Court found in favour of the insurer and coverage was excluded.

This case was digested by Michael J. Robinson, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter.  If you would like to discuss this case further, please contact Michael J. Robinson at [email protected].

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