Vacant Dwelling Vandalism Claim During a Remodel

Vacancy is not the same as unoccupancy. A dwelling is vacant when no one lives there and there is no intent to return; it is unoccupied when furniture remains but no one is living there. The policy excludes vandalism if the dwelling was vacant for more than 60 consecutive days before the loss. The insured moved out 75 days ago. The nephew's occasional overnight stays and weekly visits do not necessarily make the house occupied; the key facts are whether someone was living there and whether the insured intended to return. The lawn being mowed and utilities being on are evidence of care, not occupancy. I would interview the nephew, obtain utility records, neighbor statements, and the assisted-living admission date. If the house was vacant for 75 days, the vandalism and copper theft are excluded. The broken pipe and water damage are a separate peril; if the pipe broke because the house was unheated or unoccupied, the freezing or water-damage exclusions may apply, but I need the cause and timeline. The vacancy exclusion does not automatically exclude every peril, only those listed.

The mortgagee clause gives the mortgagee a separate right to receive loss payment and notice of cancellation or nonrenewal, but it does not create coverage that the insured does not have. If the vandalism is excluded because of vacancy, the mortgagee's interest may still be protected for covered perils, but the same exclusion applies. I would notify the mortgagee in writing of the claim, the coverage investigation, and any denial, and provide the relevant policy language. I would confirm the mortgagee's name and address from the declarations. If the insurer pays for a covered loss, the mortgagee's interest must be included in the payment to the extent of its interest. I would not pay the mortgagee for excluded vandalism without a coverage analysis. If there is a dispute, I would explain the mortgagee's right to request a copy of the policy and to file a complaint with the Oklahoma Insurance Department.

Replacement cost coverage requires the insured to repair or replace the damaged property; until then, the insurer may pay actual cash value. I would inspect and document the pre-loss condition, age, and depreciation of the windows, wiring, and walls. For the vandalism claim, if coverage is excluded, the actual-cash-value versus replacement-cost issue is moot. For any covered water damage, I would calculate actual cash value, which is replacement cost minus depreciation, and hold the recoverable depreciation until repairs are completed and documented. I would give the insured a written explanation of the difference between actual cash value and replacement cost, the conditions for recovering depreciation, and any deadline. I would also document the vacancy evidence and the nephew's statements. If the insured repairs before the coverage decision, I would still verify the scope and cost. I would not pay replacement cost for excluded items or for damage that predates the loss.