When a duly authorized agent of the insurer knows at the time the policy is issued that the building is vacant, and it was later destroyed by fire while vacant ..., the provision of the policy that the insurer shall not be liable if the building is vacant or unoccupied for a definite number of days is waived by the insurer.Syl. pt. 2, McKinney v. Providence Washington Ins. Co. , 144 W. Va. 559, 109 S.E.2d 480 (1959). In McKinney , the insured sought a three-year fire insurance policy on a building and told the insurance agent " ‘the building was vacant and probably would be vacant during the duration of the policy, might be someone in it the next two weeks or months, or possibly during the duration of the three years,’ and that the agent said ‘that didn't make any difference.’ "
Obviously this general objection was not sufficient to reach the question here involved because the exhibit in all other respects was proper to be introduced in evidence. McKinney v. Providence Washington Insurance Co., 144 W. Va. 559, pt. 4 syl., 109 S.E.2d 480; DePue v. Steber, 89 W. Va. 78, pt. 7 syl., 108 S.E. 590.
Such restrictions in a policy of insurance "do not apply to those conditions which relate to the inception of the contract." McKinney v. Providence Washington Insurance Co., 144 W. Va. 559, pt. 3 syl., 109 S.E.2d 480; Plumley v. Superior Fire InsuranceCo., 122 W. Va. 333, pt. 2 syl., 9 S.E.2d 229; Kimball Ice Co. v. Springfield Fire Marine Ins. Co., 100 W. Va. 728, pt. 2 syl., 132 S.E. 714; Medley v. German Alliance Ins. Co., 55 W. Va. 342, pt. 6 syl., 47 S.E. 101.
A condition of this character, being for the benefit of the insurer, may be waived by it, or it may be estopped to rely upon that condition as a defense in an action on the policy. McKinney v. Providence Washington Insurance Co., 144 W. Va. 559, 109 S.E.2d 480 (1959). The waiver of such a condition may be either express or implied, a distinction recognized by the West Virginia Supreme Court of Appeals in the case of Peninsular Land Transportation Manufacturing Co. v. Franklin Insurance Co., 35 W. Va. 666, 14 S.E. 237 (1891).
Petitioner argues that State Auto impliedly waived the vacancy provision by continuing to renew the insurance policy after it became aware, at the time of the 2009 vandalism claim, that the building was vacant. In support of this argument, petitioner argues that syllabus point two of McKinney v. Providence Washington Insurance Co., 144 W. Va. 559, 109 S.E.2d 480 (1959), applies: When a duly authorized agent of the insurer knows at the time the policy is issued that the building is vacant, and it was later destroyed by fire while vacant but had been occupied between the time of the issuance of the policy and the time of the loss, the provision of the policy that the insurer shall not be liable if the building is vacant or unoccupied for a definite number of days is waived by the insurer.
The first issue for our determination is whether under the facts of this case such a waiver by, or estoppel of, the Insurance Company occurred. The weight of authority and prevailing view is that if an insurance company has knowledge through its agent, when a contract of insurance is effected, that the premises are vacant or unoccupied, the issuance of the policy waives any provision as to vacancy or unoccupancy, at least so far as the existing vacancy is concerned. See, for example, McKinney v. Providence Washington Ins. Co., 144 W. Va. 559, 109 S.E.2d 480 (1959), and cases cited therein at pages 564 and 565. See, also, 43 Am. Jur. 2d, Insurance, 957, P. 906. Nebraska adheres to this rule. Rochester Loan Banking Co. v. Liberty Ins. Co., 44 Neb. 537, 62 N.W. 877 (1895); German Ins. Co. of Freeport v. Frederick, 57 Neb. 538, 77 N.W. 1106 (1899).
Other Virginia cases cited by counsel to support their respective positions are: American Liberty Ins. Co. v. Breslerman, 201 Va. 822, 113 S.E.2d 862 (1960); Foreman v. German Alliance Ins. Ass'n, 104 Va. 694, 52 S.E. 337 (1905) Connecticut Fire Ins. Co. v. Tilley, 88 Va. (13 Hans.) 1024, 14 S.E. 851 (1892). Although the court's reasoning in a West Virginia case, McKinney v. Providence Washington Ins. Co, 144 W. Va. 559, 109 S.E.2d 480 (1959), supports the Executor's position in this case, the statements of the insurance company's agent in that case could have reasonably led the insured to believe the company would not rely on the occupancy clause. In the Georgia Home case the insurance company's agent, who knew that the premises were unoccupied and would not be again occupied by the family, was asked when the policy was delivered, "if the policy was all right, and if the house was burned would the money be paid".
See Bledsoe v. Farm Bureau Mutual Ins. Co., 341 S.W.2d 627. A few cases hold that a waiver created by knowledge of an existing vacancy is not limited to that vacancy but to any subsequent vacancy which may occur during the life of the policy. See McKinney v. Providence Washington Ins. Co., 109 S.E.2d 480. Others, recognizing the recent change in policy provisions which merely suspend the insurance during a nonpermitted vacancy period, hold that a vacancy existing at the time the insurance issues is not a waiver of the policy provisions. The insured has sixty days, or such other time as may be fixed by the policy and endorsements, in which to occupy the property.
Shaffer v. Calvert Fire Insurance Co., 135 W. Va. 153, syl. 2, 62 S.E.2d 699. See also Hartman v. The Windsor Hotel Co., 136 W. Va. 681, 68 S.E.2d 34; McKinney v. Providence Washington Insurance Co., 144 W. Va. 559, 109 S.E.2d 480. The second point of the syllabus of the case of Tabler v. Hoult, 110 W. Va., 542, 158 S.E. 782, is as follows: "Parol evidence to prove an agreement between the maker and the payee of a note that the former should not be required to pay it is inadmissible under the rule inhibiting the introduction of parol evidence to contradict, vary, add to or detract from the terms of a written instrument."
See Dunton v. Connecticut Fire Ins. Co., 371 F.2d 329, 331 (7th Cir. 1967); Ekelchik v. American Cas. Co., 56 N.J. Super. 171, 177 (1959). Cf. McKinney v. Providence Washington Ins. Co., 144 W. Va. 559, 571 (1959). "Buildings in due course of construction" is to be read in the same light. If, as applied to a finished building, "construction" can be taken to include remodelling or refurbishing, still the phrase looks to some substantial continuing activities of that sort on, rather than off, the property, and here there were none on the property (and indeed, virtually none off). Counsel have found a few decisions that bear somewhat on the meaning of similar phrases in more or less similar contexts.