Texas Property and Casualty License Practice Exam

In which scenario would a property be deemed unoccupied?

1. A building with furniture but no people during a loss

2. A residence with tenants temporarily away on vacation

3. A house that has been abandoned entirely

4. A structure under renovation with no occupants

The correct answer is: A building with furniture but no people during a loss

In the context of insurance, a property is considered unoccupied when it is devoid of human presence, regardless of whether furniture or belongings are present. In the scenario of a building with furniture but no people present at the time of a loss, it is classified as unoccupied because the absence of occupants suggests that the space is not actively lived in, even though it may contain items belonging to residents. This classification affects various aspects of an insurance policy, particularly concerning coverage or claims. Insurance companies often have specific terms regarding unoccupied dwellings since they are perceived as higher risk for certain types of damages, such as theft or vandalism, since no one is there to monitor or secure the property. In other scenarios like a residence with tenants away on vacation, the property is typically considered occupied since it is still being used as a dwelling, albeit temporarily unoccupied. A house that has been entirely abandoned is often categorized differently, such as "vacant," which reflects a greater severity than simply being unoccupied. Lastly, a structure under renovation may also be viewed as occupied by the contractors or workers involved in the renovation, which again distinguishes it from being truly unoccupied.