1. Why did the court conclude that an unoccupied house did not necessarily create a substantial increase in hazard?

2. Why did the court hold that Allstate’s cancellation of the policy, retroactive to November 2001 (when Luster moved to an extended-care facility), was ineffective?

This diversity suit for breach of an insurance contract was dismissed on summary judgment, and the plaintiff’s [Estate of Luster’s] appeal presents issues of both contract interpretation and Indiana insurance law. [Wavie] Luster was a widow living alone in her house in Merrillville, Indiana. She had a homeowner’s insurance policy from Allstate [Insurance Company]. In October 2001, when she was eightythree, she was injured in a fall, and after being released from the hospital moved into an extendedcare facility. She executed a power of attorney to her lawyer, Rick Gikas, who is the representative of her estate in this litigation. She never returned home and died in April 2006, some four and a half years after her fall. Gikas had notified Allstate of his power of attorney and had directed the company to bill the insurance premiums to his law office. No one lived in the house after she left it.