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Connecticut Appellate Court Clarifies the Meaning of “Vacancy” and “Ensuing Loss”

Blogs, Insurance Coverage

In a recent decision interpreting the provisions of a homeowner’s insurance policy, the Connecticut Appellate Court held that the term “vacant” in the vandalism exclusion is unambiguous and means “unoccupied and does not contain items ordinarily associated with habitation.” The Court also reaffirmed and applied the proximate cause analysis articulated in Sansone v. Nationwide Mutual Fire Ins., 62 Conn. App. 526 (2001) to find that an ensuing loss provision did not afford coverage for the subject fire loss. New London County Mut. Ins. Co. v. Zachem, 145. Conn. App. 160 (2013).

In Zachem, the plaintiff insurer brought a declaratory judgment action seeking a declaration that there was no coverage under the homeowner’s policy is issued to the defendant insureds for damage sustained due to an explosion and fire at the insured property. It was undisputed that no one had lived at the house for more than a year prior to the claimed loss. Consequently, the plaintiff insurer argued that coverage was precluded under the policy’s vacancy exclusion, which excluded coverage for theft if the dwelling had been vacant for more than thirty consecutive days immediately before the loss. The trial court and Appellate Court agreed. 

In affirming the trial court’s judgment in favor of the plaintiff insurer, the Appellate Court adopted the dictionary definition of the term “vacant,” thus concluding that a vacant dwelling is one that is unoccupied and does not contain items ordinarily associated with habitation such as furniture and personal property. Because it was undisputed that the house was unoccupied during the relevant time period and the defendant insureds did not challenge the trial court’s factual finding that the house did not contain any items suitable for habitation, the Court went on to find that the trial court’s finding that the house was vacant for more than thirty days prior to the loss was amply supported by the record.

The Appellate Court also found that the trial court properly concluded that the defendant insureds failed to establish that the ensuing loss provision of the policy was applicable to their claim and saved it from the vandalism exclusion. In so holding, the Court followed the proximate cause analysis set forth in Sansone, supra:

In the determination [of] whether a loss is within an exception in a policy, where there is a concurrence of two causes, the efficient cause-the one that sets the other in motion-is the cause to which the loss is to be attributed, though the other cause may follow it and operate more immediately in producing the disaster…. [W]hat is meant by proximate cause is not that which is last in time or place, not merely that which was in activity at the consummation of the injury, but that which is the procuring, efficient, and predominant cause…. Proximate cause has been defined as [a]n actual cause that is a substantial factor in the resulting harm…

The Court then applied that analysis to the facts at hand and concluded that the trial court properly found that the efficient cause of the explosion was the removal of the copper pipes by an intruder, not the spark from the water heater, and, therefore, the ensuing loss exception did not apply. Specifically, the Court approved the trial court’s rationale that the spark that set off the explosion did not constitute a separate and independent hazard from which the defendant insureds’ loss ensued. 

The defendant insureds recently filed a motion for reconsideration en banc.

A complete copy of the Zachem decision is available here.