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Riots & Protection

Posted: Tue Jun 02, 2020 1:35 pm
by Cassie Henderson
There will soon be a lot of questions around what happened over this weekend regarding the looting that took place all around the United States.

My gut tells me there will not be coverage for this considering a lot of the looting was from domestic terrorist groups, unless terrorism coverage was purchased.

I am wondering if anyone has any insight from carriers or experience in general where there might be coverage? I was thinking crime but I think this was too big of a disaster for this to be considered "crime." I think this falls more appropriately into a catastrophic loss such as terrorism.

Can someone confirm this or share thoughts and questions regarding this weekend?

Re: Riots & Protection

Posted: Wed Jun 03, 2020 12:42 pm
by pageltd
Coverage would depend on the definition of terrorism, whether any of the acts were terrorism (not just straight vandalism) and the contract language in the policy.

Re: Riots & Protection

Posted: Wed Jun 03, 2020 5:11 pm
by inshru2
I would think that there would have to be a declaration that it was an "Act of Terrorism". Kind of like a declaration of emergency. Since there has not been any official declaration of "Act of Terrorism" claims will be treated as vandalism.
Looting would also be covered under theft/burglary.

Could also see as covered under the peril of riot/civil commotion.

Steve Cresci

Re: Riots & Protection

Posted: Thu Jun 04, 2020 3:55 pm
by MBRCatz
Whenever someone is wondering about coverage, the very first thing they should do, is READ THE POLICY. Wondering what the terrorism endorsement covers? READ IT. Wondering what the terrorism exclusion actually excludes coverage for? READ IT. Wondering if Riot & Civil Commotion are covered under your property form? Find someone who passed the licensing test, and read the form.

MOST property coverage forms written on "broad" or "special" forms, already cover riot & civil commotion. Sometimes they will have a total theft exclusion, or a glass exclusion, and sometimes not. Is that sign covered? Depends! Read the policy! Sometimes basic form covers riot, sometimes not. If you're talking about damage to property, go to the property policy form FIRST.

A Crime form is different from a Property form - and not quite as standardized - but I'd expect most of the property damage claims to be payable under a Property form - if the owner bought coverage. The property form is designed to cover riots and civil commotion - not the crime policy.

Terrorism - another hot coverage (that has NEVER been triggered since the first TRIA act, btw) that most people don't bother to read. Note the fine print about what is considered terrorism: ". . . to have been committed by an individual or individuals acting on behalf of any foreign person or foreign interest, as part of an effort to coerce the civilian population oi the United States or to influence the policy or affect the conduct of the United States Government by coercion."

I haven't seen any suggestions that foreign interests were involved here. I don't see where terrorism would be triggered at all - not the terrorism endorsement, and not the terrorism exclusion.

Vandalism and Riot are two different perils. Why is that important? If a building is vacant, a vacancy provision in the policy could very well exclude Vandalism, but not exclude Riot.

I just reviewed my personal homeowners insurance on an HO3 (05/11) form. There is no exclusion for Riot. Most homeowners ARE going to have coverage, subject to policy terms, conditions, limits, deductibles, etc.

Re: Riots & Protection

Posted: Thu Jun 04, 2020 5:08 pm
by Cassie Henderson
President Trump said, "Domestic Terrorism." This is why I am wondering if this could trigger Terrorism coverage. Or if any insurers have stated what they expect to pay out.

Re: Riots & Protection

Posted: Fri Jun 05, 2020 10:11 am
by wariline
I believe for the terrorism coverage to trigger, it needs to be certified by the secretary of state.

Re: Riots & Protection

Posted: Wed Jun 10, 2020 11:06 am
by NYagent301
Copy and paste from a policy written today. As MBRCatz advises READ IT, yes be aware especially in our business the words "or" "any" & "and"

Under the Terrorism Risk Insurance Act of 2002, as amended pursuant to the Terrorism Risk Insurance Program
Reauthorization Act of 2015, effective January 1, 2015 (the “Act”), you have a right to purchase insurance
coverage for losses arising out of acts of terrorism, as defined in Section 102(1) of the Act: The term “certified
acts of terrorism” means any act that is certified by the Secretary of the Treasury—in consultation with the
Secretary of Homeland Security, and the Attorney General of the United States—to be an act of terrorism; to be a
violent act or an act that is dangerous to human life, property, or infrastructure; to have resulted in damage within
the United States, or outside the United States in the case of certain air carriers or vessels or the premises of a
United States mission; to have been committed by an individual or individuals as part of an effort to coerce the
civilian population of the United States or to influence the policy or affect the conduct of the United States
Government by coercion.

I would think it would take a tremendous amount of loss to trigger Terrorism, as most policies cover riot as vandalism and would be in the public interest, rather than trigger Terrorism leaving some without. I know in 2012 when Sandy was not classified as a hurricane, it therefore did not trigger special hurricane deductibles.