On September 23, 2025, in Church Mutual Insurance Co. S.I. v. Chabad of New Mexico, the U.S. District Court for the District of New Mexico ruled that a policy’s vacancy provision did not preclude coverage for two fire losses at an insured building because — regardless of whether the building was actually being used — the insured kept enough personal property in the building to conduct its customary operations.
Chabad of New Mexico is a Jewish organization that provides educational and social programs. Chabad’s building in Rio Rancho, New Mexico, was insured under a policy issued by Church Mutual Insurance Co. that provided building and personal property coverage. While the policy was in effect, acts of arson were committed at the property on December 28, 2022, and March 5, 2023.
Chabad submitted property damage claims to Church Mutual after both fires. Church Mutual did not provide coverage for either claims due to the following “vacancy” loss condition in the policy:
If the building where the loss or damage occurs has been vacant for more than 60 consecutive days before that loss or damage, we will:
- Not pay for any loss or damage caused by any of the following even if they are Covered Causes of Loss:
(1) Vandalism;
...
A building is vacant when it does not contain enough of your property to conduct customary operations. ...
Under New Mexico law, the term “vandalism” in an insurance contract encompasses acts of arson, and it was undisputed that the fires that damaged Chabad’s property were caused by acts of arson. Thus, the narrow dispute presented to the court on cross-motions for summary judgment was whether Chabad’s property was “vacant” under the terms of the policy, which both parties agreed were unambiguous.
Church Mutual argued that the policy’s vacancy provision precluded coverage because, prior to both fires, Chabad was simply storing personal property at the location and had not used the property for its “customary operations” since at least September 2021. Church Mutual argued in the alternative that no coverage was owed for damages from the March 2023 fire because the majority of the tables and chairs stored at the property were irreparably damaged in the December 2022 fire, and the remaining personal property was insufficient for Chabad to conduct its “customary operations” thereafter. In support of this argument, Church Mutual relied solely on photographs taken after the December 2022 fire, which depicted a room in disarray with damaged chairs.
Chabad argued that it was entitled to coverage because the evidence established that its property was not “vacant” under the policy’s vacancy provision before or after the December 2022 fire. Chabad highlighted deposition testimony from its rabbi and from an employee, each of whom stated that everything needed to operate services at the property was present, including tables, chairs, books, kitchen utensils, and more. The employee also testified that only about 30 of the 110 chairs at the property were damaged in the December 2022 fire, and only two tables were damaged. Additionally, Chabad cited the report from Church Mutual’s adjuster, which stated that his “investigation revealed that while the building was not actively being used, there remained sufficient contents in the structure for the Insured to continue their normal operations.”
While examining the policy’s vacancy provision, the court noted that the policy language at issue did not define “vacancy” to include a “use” element; instead, it focused only on whether there was enough personal property in the building to conduct customary operations. Based on the lack of a “use” element, the court rejected Church Mutual’s first argument regarding Chabad’s lack of use of the property as “irrelevant.” The court also rejected Church Mutual’s argument that no coverage was owed for the March 2023 fire because the majority of the tables and chairs stored at the property were irreparably damaged in the December 2022 fire, finding that its reliance on photographs — which did not show a majority of the tables and chairs damaged — was “borderline frivolous.”
The district court held that the unrefuted evidence established that Chabad’s property contained enough of its personal property to conduct customary operations at the time of both fires. Focusing on the policy language, the court noted that “[w]hether a building is being used for its customary operations is irrelevant under the Policy. What is relevant under the Policy is whether there is enough of the insured’s personal property to conduct customary operations.”
Accordingly, the court granted Chabad’s summary judgment motion, denied Church Mutual’s summary judgment motion, and held that Chabad was entitled to coverage under the policy for loss or damage resulting from the December 2022 and March 2023 fires.
