Some 140 vehicle fires, more than a dozen structural fires and nearly 200 arrests were reported in the wake of Baltimore riots that shook the city in late April. And more than 200 businesses were damaged during the riots, according to Maryland Gov. Larry Hogan.
These riots – which erupted after the funeral of Freddie Gray, who died of a deadly spinal cord injury sustained during police custody – prompted Gov. Hogan to impose a state of emergency from April 27 to May 6. From April 28 until May 3, a Baltimore citywide curfew ordered residents to stay home between 10 p.m. and 5 a.m.
Representatives of the insurance industry say that for most of the damage that’s been done, as long as the individuals and the businesses are insured, they would have coverage. Auto, homeowners, and business insurance policies generally include coverage for property losses caused by riots and civil commotions, such as those that occurred in Baltimore, according to the Insurance Information Institute (I.I.I.).
Shelley Arnold, president of the Independent Insurance Agents of Maryland, also noted: “Riot and civil commotion is a named peril on almost every property policy. When we talk about riots and civil commotion, a lot of policies actually define them to include looting.”
But she said there are some coverage issues that come into question because some consumers may not have full coverage.
For example, in Maryland, vehicles must be covered by liability insurance but not for comprehensive and collision coverage, “and that’s where people would pick up the coverage for the cars burning,” she said. “If they don’t think they need comp and collision coverage on their auto, they are probably not going to buy it. So it will become an issue of, do they have that coverage? If they have comp and collision coverage, riot and civil commotion is a named peril on the auto policy.”
“The biggest problem with the uninsured losses is going to be those vehicles that didn’t have comp and collision coverage. They didn’t have comprehensive coverage because it’s optional,” Arnold said. “And I also think the Maryland Insurance Administration and the governor’s office will be working very closely with them to make certain that what we think can be done will be done.”
The other potential coverage question involves business income. “Are these businesses covered for business income if there is a direct loss? If a restaurant has a direct loss, and if they have business income coverage, they are going to have coverage for the loss of income during the shutdown,” she said.
A gray area, however, is going to be civil authority additional coverage, Arnold said. “Is the curfew considered an act of civil authority? For people who do not have direct damage, are they going to be provided or given coverage for their business income? I think that’s going to be the gray area and that’s going to be where we are going to see some time to settle this type of claims.”
According to the standard Insurance Services Office’s Commercial Property Business Income Form-CP 0030, civil authority coverage for business income begins 72 hours after the time of the first action of civil authority that prohibits access to the described premises and applies for a period of up to four weeks from the date when the coverage began.
As far as the personal property, it’s almost a certainty that those types of losses will be covered, Arnold added. “And don’t forget that if they have a homeowners’ policy, there is additional living expense coverage.”
Homeowners policies pay to repair, or rebuild, an insured home if its structure is damaged or destroyed as the result of a riot or civil commotion, as well as to replace the homeowner’s personal belongings if they are damaged or stolen during the event, according to the I.I.I. And if the home is rendered uninhabitable by the damage caused by a riot or civil commotion, policyholders can file an additional living expenses claim to finance their temporary housing expenses until their residence has been repaired.
Fire damage is probably going to have the biggest loss numbers, Arnold noted. “You had the CVS store fire and you had a huge senior center that was going to have 60 units, a recreation center for the youth, and that was burned to the ground. There were several home fires and there were vehicle fires, so I think the fire damage is going to be at the top of the list money-wise.”
Arnold added between the looting and the theft and business income losses because of the curfew, “the businesses have been losing money hand over fist in Baltimore, even down by Camden Yards, the restaurants and the harbor, the new casino…so there is a lot of business income that may not even be in that general area of the riot, but that’s going to be impacted by the curfew.”
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