Trepanier v. Mercantile Ins. Co. of America

The defendants rely mainly on the case of Stone v. Insurance Co.,69 N.H. 438, in support of their motion. In that case the policy became inoperative if without the insurer's assent the risk was increased or the property was vacant by removal of the owner or occupant for over thirty days. As the policy was construed, there was an unoccupancy for over that length of time which did not amount to a vacancy. It was held that the unoccupancy might be found to be an increase of the risk, and thus suspend the insurance. The case has no bearing upon an unoccupancy not exceeding thirty days. It is without authority upon the situation here presented, and the opinion does not assume to pass upon such a situation. The rule that "The test is not what the insurer intended its words to mean, but what a reasonable person in the position of the insured would have understood them to mean" (Watson v. Insurance Co., 83 N.H. 200, 202), is to be the guide of construction here, without prior decision of the meaning.

The policies here considered require assent for an unoccupancy exceeding thirty days. If the implication that one for a less time does not affect the insurance is not compelled, it is deemed the most reasonable one. Most persons insured, reading their policies with average standards of intelligence, would be entitled to believe, and would believe, that an unoccupancy for less than the time stated to require assent was within the terms of the insurance. The clear, if not inescapable, inference from the statement of the time beyond which assent must be obtained is of permission to that time. Unassented — to unoccupancy exceeding thirty days makes the policies inoperative, regardless of any increase of risk. The corollary that a shorter unoccupancy is of no effect upon the insurance whether or not the risk is thereby increased, is one naturally and property to be understood to follow. The evident purpose of the clause relating to unoccupancy was to establish a fixed test of increase of risk in respect thereto, and to relieve both insurer and insured from contention about it.

Former result affirmed.

BRANCH, J., did not sit: the others concurred.