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How Insurance Policies Respond to Vandalism

Curious if your home or business insurance covers vandalism?

When vandalism to property happens, homeowners, business owners, and renters are often left wondering if damages are covered.

The good news is that generally, yes, your insurance has you covered. However, there are some certain circumstances where vacant properties aren’t covered—which are especially pertinent during this global pandemic.

The information below serves as an overview. Nonetheless, policyholders are strongly encouraged to read the terms of the policy purchased, as terms and definitions can vary from one policy to another.

As always, if you have any questions, please don’t hesitate to contact us!

Homeowners and Dwelling Fire Policies

Typically, homeowner’s insurance and dwelling fire policies do cover riot and civil commotion claims. For those that aren’t aware, dwelling fire policies are policies for rental properties.

It’s important to be aware that Homeowners and Dwelling Fire policies have an exclusion in them for vandalism and malicious mischief when the home has been vacant for a certain amount of time. Generally, that is either 30 or 60 days. What constitutes “vacant” can and does differ between policies. This ranges from the named insured or tenant no longer residing in the home, to the home not having any furniture and amenities in it.

Commercial Property Policies

Commercial policies also typically cover vandalism. However, they differ from home and rental policies when it comes to vacancy exclusions.

Commercial Property Policies have a “Vacancy Provision” that states if the building has been vacant for more than 60 days, then vandalism, glass breakage, theft, and attempted theft are all excluded. 

What constitutes “vacant” depends on the type of policy. If the policy is covering the building itself, then it is defined as “vacant” unless at least 31% of the total square footage is rented to a lessee and used by the lessee to conduct its customary operations, and/or used by the building owner to conduct customary operations. If the policy is a tenant’s policy, which just covers the tenant’s business property within the building, it is defined as “vacant” when it does not contain enough business property to conduct customary operations.

This is particularly relevant today given that many businesses have been shuttered due to Covid-19. Even those that are still operating run the possibility that an insurance company could invoke the Vacancy Provision if their employees are now working from home. This depends on either:

  1. Significant business property is no longer on the premises (for a tenant’s policy)
  2. The building is no longer “used by” the lessee or owner to conduct customary operations (for the building policy)

One particular concern is that there have been many court cases that have found that arson constitutes vandalism. Replacing some windows and cleaning up graffiti is one thing. The building being burnt down is quite another…

Have More Questions?

Contact Chastain Otis today with help regarding your insurance policy and vandalism or civil commotion. Our independent insurance agents are here to help!

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