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Demolition costs of buildings destroyed by riots and civil unrest

Do you know what are your insurance limits are for debris removal?

Debris from riots. Burned down buildingThe times of social unrest were hard on everyone.   Including many business owners, who are finding out that the did not have enough insurance coverage for debris removal.

Several commercial property owners were businesses were torched by rioters.   Those business owners have learned that they did not have enough coverage to clear away the debris.

This clause in the commercial property insurance policy does not usually get any attention attention.  Most insurance policies have a limit on the amount of coverage to remove the debris from a covered loss.  Most insurance policies have a limit from $25,000-$50,000 for the removal of the debris.

According to the Insurance Journal’s September 21, 2020 issue, businesses in the Minneapolis-St Paul area received bids from contractors of up to $200,000 to $300,000 to remove the debris after the riots.

Debris removal is a coverage that is generally built into the policy forms. But it is not a limit shown on the declaration page.

No one focuses on the amount of debris removal in their policy until these types of situations arise.

Could you image having $150,000 to $200,000 uninsured loss.  What would you do?

Some attorneys are arguing that law and ordinance coverage, which requires insurers to include the cost to comply with current building codes when recalculating building codes, could be used.  This has still yet to be determined if policy language will allow them to use this coverage or not.

These small sublimit details in the insurance policy and these sublimit that can cause great distress at the time of the loss.

When comparing policies, you must look at every fine detail not just the limits and premiums that are shown on the declarations page.

When it is just your building that is damaged, the cost structure is different then when there is a natural disaster or some time of large event.   In our society, increased demand leads to increased prices.  Therefore, the coverage limit you have may be sufficient under ideal situations. But in insurance, we need to always consider what is the risk when the situation is the worst scenario.

Claims from the riots over the death of George Floyd are estimated to reach over $2 billion dollars according to Bloomberg News.

In 2020, riots, hurricanes, and the massive wildfires out west, have caused the property insurance claims market to spike.  The spike is not only because of the number of claims being paid, but also the increased cost to re build due to the high demand of building materials.  And because of this, we will be seeing increased property premiums in the next few years for both commercial and residential customers.

There are steps you can take to help offset the increased premiums that we will see in 2021.   

Give Huff Insurance a call at 410-647-1111 to talk over the best options for you and your business.  Talking to an agent to explore options is the best defense.

Remember,  no 2 insurance policies are exactly the same.  You need to pay attention to the small details in the policy forms. That is the only way to determine if the policy is actually a better value or not.  And having an agent like us on your side will help reduce the oversight of the small details.

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