Riots, Unrest, and Insurance: What Gives? [UPDATED]

Given the current circumstances, it seems valuable to revisit a post we did a half-decade ago when Baltimore went up in flames. The question then, as now, was whether or not the property destruction would likely be covered under one's insurance. Of course, it gets a bit more nuanced, as coverage will differ slightly by locale and policy form. I reached out to FoIB (and P&C Guru) Bill M, who reminded me that a key distinction lies with the difference between terrorism (generally excluded) and civil unrest (generally covered).

He also confirmed that coverage is likely under both homeowners and commercial lines policies. As he so often instructs us: look to the exclusions for the best answers.

And with that out of the way, here's what we wrote in '15, and which applies today, as well:

Homes, businesses
and cars have been burned, looted and otherwise damaged, leaving owners
wondering what, if any, insurance payments they can expect.

The Insurance Information Institute (III) has helpfully published a media advisory confirming that, generally speaking, such damage is considered a covered event, and claims will likely be honored:

"Auto,
homeowners, and business insurance policies generally include coverage
for property losses caused by riots and civil commotions, such as those
occurring this week in Baltimore ... Standard business property
insurance policies provide coverage for the structure of the building as
well as the contents inside"

And for folks with Business Interruption coverage, "insurance
reimburses losses when a covered peril forces a business to temporarily
close its doors ... [and pays] employees and vendors, not to mention
the rent and electric bills."

Whew!

As always, be sure to check with your own carrier to confirm whether or not these exposures are, in fact, covered.

UPDATE: The folks at the Insurance Information Institute (III) have this timely update:

"Standard homeowners policies will cover damage to the property caused by fire, an explosion, a riot or civil commotion, vandalism or malicious mischief. This would include coverage to the structure of the home, as well as any personal possessions."

"Damage to the physical plant of a business and its contents that is caused by fire, riots, civil commotion or vandalism is covered under a Business Owners Policy (also known as a BOP). However, coverage for plate glass windows is often sold separately."

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