In Mehic v. Allstate Property and Casualty Insurance Co., the U.S. District Court for the Northern District of Georgia determined that an insured did not satisfy a condition precedent to coverage under a homeowners policy — keeping the insurer apprised of the property’s occupancy — thereby finding that the insurer had no duty to provide benefits. Mehic arose after the insured’s home, which she had not inhabited full time in nearly three years, was damaged in a fire. Although the parties disagreed as to the cause of the fire, be it vandalism or something else, there was no dispute that the insured did not notify the insurer of any changes regarding the occupancy or use of her home.
The insured left her home in 2017 when she began living with her son. During that time, she rented the home out to her nephew and his family. Eventually, her nephew moved out and the insured split her time between her home and her son’s home. Allstate, though, was never made aware of the fluctuations in the home’s occupancy. In 2020, a fire broke out at the home. The insurer’s investigation — as well as a parallel investigation by the local fire department — concluded that at the time of the fire, which was believed to be the intentional result of vandalism, the home was vacant and unoccupied by anyone, let alone the insured.
The insurer moved for summary judgment, arguing that it had no coverage obligations because the insured failed to notify it of changes in use or occupancy of the home, which is a condition precedent to coverage. In agreeing with the insurer, the court followed general rules of contract construction. The court began by looking to the four corners of the document to ascertain whether the policy language was so clear and unambiguous so as to ascribe the words their plain meaning. Notably, the court was careful to state that as compared to the general rule that ambiguities are construed in favor of the insured, “an equally valid rule is that an unambiguous policy requires no construction, and its plain terms must be given full effect even though they are beneficial to the insurer and detrimental to the insured.”
The court found that policy clearly (1) required the insured to notify the insurer of changes in use or occupancy of the home and (2) prohibited suit against the insurer unless there has been full compliance with all policy terms. Because the court found the policy to be unambiguous in those instances, it was under no authority to depart from the plain meaning of those words. As such, the insured could not maintain a claim for coverage.
