occupancy

Occupancy, in a property insurance context, refers to the manner in which a building, dwelling, or premises is used and whether it is actively or temporarily occupied or vacant. Insurers use occupancy to evaluate risk, determine eligibility and premium, and apply policy conditions or exclusions because the presence or absence of people, operations, furnishings, and ongoing maintenance can affect the likelihood and severity of loss. An inaccurate description of occupancy by the insured—such as failing to disclose a vacancy, rental use, business use, or change in tenants—can affect underwriting, coverage, or claim response.