After isolated riots and civil unrest last week left several businesses in Albuquerque with broken windows and other damage, some owners have wondered whether their insurance would cover the damage.
The short answer? It depends on the type of coverage you have and the age of your building, among other factors.
“Whether you think you’re covered or you’re not, you might not get any money back from insurance,” said Joe Farr, president of Duke City Commercial, which manages commercial properties across metro Albuquerque.
Last weekend, rioters broke windows and damaged property at Downtown Albuquerque storefronts, after peaceful protests against the killing of George Floyd in Minneapolis had subsided. While the vandalism in Albuquerque was relatively minor compared to some other cities, it left some businesses with damage that needed to be repaired, and questions about whether their buildings were properly insured.
David Tinley, CEO of Daniels Insurance in Albuquerque, said most businesses who have purchased property insurance should be in pretty good shape, though some factors might be out of their control.
“You have to read the actual policy language, but most of them cover it,” Tinley said.
Insurance companies break property insurance into three levels: basic form, broad form and special form. Joseph Menicucci, an independent insurance agent at Downey & Company in Albuquerque, said most companies with property insurance have special form, the most inclusive.
Menicucci said a typical special form policy would cover both theft and vandalism, while basic form may not.
John Dziak with Associated Insurance Professionals in Albuquerque said the biggest difference between the two forms comes down to the age and condition of the building in question. The older and more run-down a building is, the less likely insurers are to provide extra coverage.
“If it’s a 100-year-old building with a 100-year-old roof, they’re not going to like that,” Dziak said.
Whether it automatically makes sense to file a claim is another matter entirely, however. Tinley said some plans have deductibles that are so high – in excess of $5,000 for some historic buildings – that it doesn’t make sense to file a claim and risk changing your rates in the future.
“In those cases, typically you’re dealing with something small,” Tinley said.
Menicucci said some businesses that are renting their space might not have property insurance at all, opting instead for general liability insurance, which might not cover property damage. Still others, he said, may have let their coverage lapse as the COVID-19 pandemic forced businesses to close.
“Insurance can be expensive, it can be an expensive burden,” Menicucci said.
One potential complicating factor would be the designation of the riots as terrorist activity, following President Donald Trump’s declaration that the United States government would designate the antifa movement as a terrorist organization on Twitter last weekend.
Menicucci said such a designation could potentially classify the damage as terrorist activity, which traditional property insurance doesn’t cover without additional liability coverage in compliance with the federal Terrorism Risk Insurance Act of 2002. Menicucci and Dziak both described the situation as a gray area for businesses and insurers alike.
“I don’t know if any (insurance) carrier has made a determination on that,” Dziak said.
In any event, the insurance professionals agreed that the first steps any business owner should take are taking photos of the damage, filing a police report and boarding up damaged windows to make sure things don’t get worse.
“The biggest thing is to get it boarded up, and get it fixed as soon as possible,” Menicucci said.