A federal Arkansas court issued a recent ruling that reminds everyone in the property insurance claims business of the serious consequences policyholders face when the insured building is vacant or unoccupied. 1 Kenneth Milligan purchased a long-vacant house for $7,000 and immediately obtained a landlord insurance policy from Travelers Personal Insurance Company. The policy came with a $368,000 limit, and just days later, the property was destroyed by fire. Milligan filed a claim, but Travelers denied coverage, citing policy exclusions related to vacancy and vandalism. The dispute ultimately culminated in the insurer’s motion for summary judgment, which the court granted.
The facts, as presented by Travelers and uncontested by Milligan, painted a picture of a property devoid of the hallmarks of normal occupancy. The house had no utilities, no appliances, and only a few pieces of broken furniture. Notably, a neighbor who had lived next door for twenty years confirmed that the property had never been inhabited for 20 years. Even more critically, Milligan failed to challenge any of these facts in a manner required by the court’s procedural rules. He did not file a response contesting the insurer’s statement of material facts, and his only submission was a single-sentence denial of the motion with a vague expression of his desire to proceed. This procedural failure meant that the court accepted Travelers’ version of events as true.
The insurer’s investigation revealed that the fire originated in two separate locations—one in the base of the home’s electrical panel and one in the interior stairwell. However, the house had no electricity connected and no gas service. Surveillance video from a neighbor’s security camera showed a man being dropped off behind the house early in the morning on the day of the fire, carrying a container, walking around the home, and then leaving. Smoke was visible minutes later. An expert fire investigator hired by Travelers concluded that the fire was intentionally set, most likely by human involvement, given the total lack of utilities and appliances that could have caused an accidental fire.
The court concluded that the fire would be covered unless facts showed that two key exclusions in the policy barred coverage. The first was whether the home had been vacant for over 60 consecutive days before the fire. The second was whether the fire was the result of vandalism. The judge emphasized that there was no genuine dispute of material fact, as Milligan had offered no evidence to the contrary. The court found that the structure was vacant and that the arson fire constituted vandalism.
This case illustrates how vacant or unoccupied buildings raise red flags for insurers, particularly when significant claims are filed shortly after policies are issued. Courts will scrutinize such cases closely, and when facts show that a property is not maintained or occupied in a meaningful way, exclusions for vacancy and vandalism will come into play.
The ruling serves as a cautionary tale for policyholders who attempt to insure long-abandoned or vacant properties. Insurers will apply heightened scrutiny to such claims, especially where evidence of arson exists. Milligan’s lack of engagement in the factual dispute sealed the outcome. His silence in the face of the insurer’s evidence ensured the summary judgment.
One point not raised is the issue of whether arson is vandalism. I suggest that those interested in this topic read the article I wrote about Ed Eshoo, who won a case last year on this point, Vacancy Exclusions for “Vandalism” Should Not Apply to Arson Fires.
Thought For The Day
“Facts do not cease to exist because they are ignored.”
—Aldous Huxley
1 Millgan v. Travelers Personal Ins. Co., No 2:23-cv-00179 (E.D. Ark. Apr. 28, 2025).
#Vacancy #Occupancy #Arson #Invite #Coverage #Issues