Is Your Property Covered for Vandalism Damage?

Many people think that damage caused by vandals is merely an annoying nuisance, but the fact is that vandalism can result in extremely costly losses. In addition to the thousands of dollars it costs to repair structural and cosmetic damage, there are added costs due to the effects of vandalism and the repair process. Businesses, for instance, lose substantial sales that can be difficult to calculate.

It is therefore important for homeowners, business owners, and organizations, such as condominium associations, to understand whether their insurance policies cover vandalism damage and any applicable exclusions. Insurance companies can be reluctant to pay claims for vandalism and may undervalue them, particularly for businesses. It often requires the start of legal action to encourage insurance providers to honor the terms of their policies and pay fair amounts to cover vandalism damage.

Commercial Property Insurance

Policies written to protect commercial property, which are often known as business hazard insurance, frequently cover losses caused by vandalism. It is important to read the policy details closely to understand what precisely is covered and what may be excluded.

Damage Commonly Covered

Commercial property insurance will generally cover vandalism, such as:

• Broken windows
• Damage to doors and the building structure
• Defaced signs
• Ruined inventory
• Writing/tagging on business property
• Damaged equipment or tools

However, it is important to look at the policy to determine whether it is a “named-peril” policy. If it is, then the vandalism or specific acts of vandalism causing your losses must be listed in the policy as a covered loss.

When dealing with damaged inventory, it is essential to note the policy details regarding whether the policy will cover the cost of replacing the merchandise or the cost paid at the time the merchandise was acquired. It is also critical to note whether repairs must be performed to specific specifications and what the coverage limits are.

Beware of Exclusions

Some commercial property insurance policies specifically exclude vandalism. Other policies require an endorsement to cover particular types of damage. For instance, if you had damage to the plate glass in a storefront, you might need to add a plate glass endorsement to obtain coverage for smashed or damaged glass.

Commercial policies will often decline to cover vandalism damage if the premises are vacant for too long. For many policies, 60 days is the limit before coverage exclusions set in. Other policies may not exclude coverage unless the property has been vacant for 90 days or more.

Business Interruption and Lost Sales

As mentioned above, the cost of repairing damage or replacing destroyed property is not the only expense business owners incur because of vandalism. They frequently suffer losses due to business interruption. In addition to the loss of sales, the damage to reputation and standing caused by vandalism can be difficult to value or remedy. If a business is mired in a dispute with its insurer and that dispute delays repairs, these losses can mount at a frightening pace.

Homeowners Insurance

Many homeowners’ insurance policies cover vandalism under the heading of “malicious mischief.” Coverage can include not only damage to the exterior of the home but also damaged or stolen personal property inside the home. However, vandalism coverage in homeowners’ insurance policies is not universal, so it is important to consider policy details. Even when damage is covered, it may be subject to limits and exclusions.

Look at Policy Limits

When reviewing homeowners’ insurance coverage, most people look at the cost to replace the dwelling and contents. In Florida and other places subject to storm damage, people will also look at wind and hail deductibles. But they often don’t check coverage limits on damage caused by vandalism.

Because the cost of labor and materials needed for repairs has increased tremendously in recent years, many policies have limits that are too low to provide adequate coverage. However, even when a policy is supposed to provide coverage for damage at an amount adequate to cover your vandalism losses, insurers can decline to pay or offer to pay only a fraction of the true cost to repair the damage. When an insurer acts in bad faith or otherwise fails to live up to obligations under a policy, an attorney who focuses on insurance claims can often negotiate or take legal action to get full payment for losses.

Exclusions

Some homeowners’ insurance excludes vandalism or certain acts of vandalism. Or you may be required to purchase a rider to opt into coverage for vandalism.

Generally, most policies will not provide coverage if the acts of vandalism are committed by someone covered under the policy, such as a member of the family. If someone covered under the policy consents to an act of vandalism, then coverage will also usually be excluded.

Supporting Your Insurance Claim for Vandalism Losses

Thorough documentation is the key when it comes to obtaining insurance payments to cover vandalism losses. Photographs of damage often provide solid evidence, although an insurance company may still insist that the damage was preexisting or caused by someone excluded from coverage. Police reports can also provide key evidence of vandalism losses, so it is wise to report the vandalism to the police even if you don’t believe they will take any action to apprehend those responsible.

While you generally need to have an insurance adjuster inspect the damage before making repairs, there are situations where delaying repairs can lead to further damage. When you contact the insurance company initially, be sure to ask whether they want you to take any measures, repair, or stabilize damage, or whether you should wait for the inspection. Document all your correspondence with the insurance company.

If You Need Help Getting the Insurance Company to Pay

Insurance companies invest millions of dollars in advertising to create the impression that they are friends you can count on to support you in times of need. But they operate to make money like every other business, and they can make more money when they pay as little as possible on claims.

At VerPloeg & Marino, we understand this dynamic very well because we have decades of experience helping policyholders get fair treatment when insurers have wrongfully delayed or denied claims. If your insurer is disputing coverage of a claim involving vandalism or anything else that should be covered under your policy, we invite you to schedule a consultation with a member of our team to learn how we may be able to assist. We represent clients throughout the U.S.

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