Riots and Homeowners Insurance

For the better part of this past week, I was out of the office at family camp in Minocqua Wisconsin.  I really tried to avoid my phone and the emails and news that goes with it.

As a result, I had no idea that while I was enjoying the world-famous Min-aqua-bat trick water ski team (photos here), the St. Louis suburb of Ferguson was burning after the shooting of Michael Brown.

When I finally looked at the Wall Street Journal and New York Times on Tuesday, the shooting and aftermath was front page news.

As I looked through the photos on the WSJ website, I could hardly believe that this was happening less than 10 miles from my home – in my mind, this is the kind of thing that happens somewhere else.

Years ago, when I was renting an apartment, I bought some property insurance (although in retrospect, I didn’t have anything of value) and I actually read the entire policy.  I laughed out loud at one point because the policy excluded damage resulting from riot, insurrections and war.

It seemed like such a remote possibility that I haven’t given it any thought since then.  Seeing the burning Quick Trip and reading that most commercial businesses would probably be covered by insurance, it made me wonder again whether or not I was covered – especially now that the idea doesn’t seem so impossible.

I called my property and casualty broker and it turns out that my homeowner’s policy does not exclude damage resulting from riots, but does exclude damage that result in war.

It’s still a unknown how insurers will treat these events, which could be considered vandalism, riot, civil unrest or something else entirely.

After Katrina, some homeowners thought they would be covered, but their policies excluded flood damage and even though a hurricane had occurred, and would have been covered, the actual damage came from the flooding, which wasn’t covered.

We actually had a flood in our home earlier this year when a big rainstorm overwhelmed and outside drain and water came pouring into the basement.  Normally, that wouldn’t be a big deal, but, as it happened, we had all of our rugs and furniture in the basement because we were redoing the floors on our ground floor.  What are the odds!?!  Thankfully, the damage was so minor, we didn’t make a claim.

Whatever the odds are, we all face risk all the time, which is why insurance is so important.  You can’t insure every risk, but you can figure out what needs to be insured and what you’re willing to accept if a bad outcome happens.

We’re not insurance brokers, but we can help.  If you haven’t done so in a while, it makes sense to revisit your homeowner’s policy and make sure it says what you think it says.  While I was out of town, I happened to get the annual checkup letter asking me if anything has changed and you can be sure I will go through it in detail over the weekend.

In the meantime, I will keep following the news in Ferguson, hoping that the unrest will settle and that peace and calm will prevail.