Over-reaching Farm Bureau takes two hits in one week
Farm Bureau insurance has been very aggressive in attempting to enlist the activist Michigan judiciary in its campaign to deny insureds' purchased benefits. For example, it has been a leader in the effort to avoid paying any liability benefits under its policies, if the "negligence" of the wrong-doing insured is also "in the nature of a criminal act" (this vague policy phrase includes negligent discharge of a BB gun, negligently endangering a child, failing to take the door off an abandoned refrigerator, and dozens of other "crimes"). Michigan is about the only jurisdiction that allows such a broad interpretation of "criminal" acts in insurance policies, leaving many paying insureds without the coverage that they thought they had purchased. Recently, Farm Bureau took a slap-down from the Court of Appeals on two efforts to further restrict insured's rights.
In Ellis v. Farm Bureau, the Plaintiff purchased coverage on her rental property a few weeks before commencing renovations. She explained the extensive renovations to the agent, and the agent even visited the property after the current tenants vacated and the contractor started work. Unfortunately, the contractor had to be replaced, and the property was unoccupied by tenants for three months and a few days.
Just as Ms. Ellis was considering a new tenant, vandals entered the property and caused extensive damage. When she presented her damage-insurance claim to Farm Bureau, it denied her right to collect, citing a clause in its policy (which Farm Bureau apparently admitted it had never provided to Ellis) that invalidated the policy if the property was "vacant" for 60 days. The Court noted that under longstanding law, an "insured can be said to be 'occupying' a building without continuous possession".
Given this pre-existing doctrine, the Court felt that Ellis' documented efforts to reasonably undertake renovations and then obtain new tenants, which efforts had been brought to Farm Bureau's agent's attention, were adequte to prevent the applicaton of Farm Bureau's proscription on "unoccupied" property. One more of Farm Bureau's aggressive claims had been blunted by the courts.