With the recent events taking place in our country I feel it is important to elaborate on riot and civil commotion coverage regarding homeowners, auto and small businessowners resulting in arson and property damage. These are perils that are not commonly discussed in everyday life but given the current climate I feel our clientele would benefit from this post.
It makes complete sense that businessowners and homeowners would be uneasy regarding property damage. Even well-meaning, peaceful protests can escalate and lead to unintentional damage to the surrounding area. The opportunity presented in large gatherings for those meaning to do harm can result in destroyed property, arson and other damage to public and private property.
So, the million dollar question is damage done by looting and rioting covered? YES!
Standard insurance policies do cover damage that results from rioting, looting and civil commotion. This should cover damage caused by rioters, protestors as well as damage caused by police or the authorities resulting from civil commotion.
Auto Insurance Coverage for Riot and Fire Damage
Auto Insurance companies offer an optional coverage known as comprehensive coverage or other than collision coverage. This other than collision coverage applies to perils such as fire, vandalism, glass damage, falling objects, theft and flooding. When a car owner carries this coverage they would be reimbursed minus their deductible for any damage resulting from these perils listed above. For example, in the event of a riot or civil commotion causing damage to their car due to a fire, graffiti, broken glass, physical damage or theft of the vehicle comprehensive coverage would apply. If you do not currently have this coverage and only carry liability only on your vehicle you can call your agent and they can add this coverage for you at any time.
*Please see a more detailed definition on each as I reference an article below "Does Insurance Cover Riots and Looting?" by Millie Workman, CPCU, AU, CRIS, MLIS, AFIS, ERIS, TRIP, and Trevor Antley date June 4, 2020.
Business Owner Insurance for Riots & Civil Disturbances
For businesses who have purchased property coverage, their commercial property insurance policy will cover losses from protests, riots, and civil disturbances. Commercial property insurance covers damage that results from vandalism, rioting, and civil commotion. These policies specifically include coverage for acts of looting in connection with a riot or civil commotion.
Many business owners have a businessowners policy (BOP), which combines property, liability, and business interruption coverages. These policies should cover any damage to a business' physical structure and its contents resulting from vandalism, rioting, or civil commotion. Coverage for plate glass windows is often not included and needs to be purchased separately because of their high risk. Businesses with a BOP can also opt-in for additional coverage for things like criminal activity, spoilage of inventory, and more.
BOPs are intended for small to midsize companies, normally with no more than 100 employees and $5 million in revenue. BOPs cost on average $1,200 a year, according to the Insurance Information Institute. Coverage purchased as a single package is meant to be less expensive than if the coverage were purchased through separate insurance policies.
Note that some businesses, such as restaurants, may not be eligible for a BOP if there are specific risks inherent to their business. These businesses will need to purchase individual coverages separately.
Business Income Coverage During Riots & Civil Commotion
Business income insurance — also known as business interruption insurance — could cover lost income if the business is forced to suspend their operations or limit hours due to rioting. However, this is only triggered if the business' premises are physically damaged.
Business income coverage is typically subject to a waiting period. "The waiting period applies to income losses, including those insured under civil authority coverage," says Loretta Worter, vice president of media relations for the Insurance Information Institute. "It does not apply to extra expense losses. A typical waiting period is 72 hours."
Civil authority provisions provide coverage for lost income and/or extra expenses resulting from access to the business being prohibited by civil authorities like the fire department, police, or National Guard due to rioting or civil commotion. Civil authority provisions will only cover lost income during a limited time period, usually four weeks. This can be extended by paying additional premiums.
Homeowner Insurance for Damaged Property
Typical homeowners insurance policies cover damages that result from vandalism, rioting and civil commotion, fires, explosions, etc. This coverage includes damage to structures on the property, as well as to personal property and possessions inside and outside the home.
If the damage is extensive enough that you can no longer live in your home, standard home insurance policies and renters insurance policies may cover the cost of living away from home. Coverage for additional living expenses (ALEs) can be used while your home is being repaired or rebuilt, and ALEs can include the cost of things like hotel bills, meals, and other necessary expenses.