Once again, a reminder that I’m working on a book project with an October publication deadline (it’s gonna be tough to make it). The working title of the book is “20/20 Vision: Why Insurance Doesn’t Cover the COVID-19 Pandemic.” Because of that, my blogging has been sparse.

However, I have noticed some recent news stories that reminded me of existing blog articles you may not have read. So, I’m taking a break from the book for an hour or so and providing a couple of article links below that you may not have read but might find interesting given current events.

The first one is a reminder that this week is the 19th anniversary of “9/11.” Here’s is something I posted last year:

In Remembrance….

And here is another newsworthy article:

Owners Say Insurance Inadequate to Cover Demolition of Riot-Destroyed Buildings

According to the article, “Some commercial property owners whose businesses were torched by rioters are learning that they don’t have enough insurance to clear away the debris. The Star Tribune newspaper reported that many property owners in the Minneapolis-St. Paul area purchased policies that limit payouts for demolition costs to $25,000 to $50,000, but contractors have submitted bids of $200,000 to $300,000. In many cases, the cost of demolition is greater than the value of the property, the newspaper said.”

This reminded me of an article I wrote in 2018 called Debris Removal.” Many policyholders are not aware that their property policies may restrict how much coverage is provided for debris removal. That is especially true in commercial lines. It might surprise you how often the amount available is inadequate, which is about 100% of the time following a widespread event like a hurricane, tornado, or wildfire.

According to a risk management consultant I know:

I use the following formula developed by myself and a fellow architect friend:

  • For every 6000 sq. ft. of solid brick construction, it takes $70,000 to haul it away.
  • For every 6000 sq. ft. of steel construction, it takes $60,000 to haul it away.
  • For every 6000 sq. ft. of frame construction, it takes $50,000 to haul it away.

These costs are about 60% dump fees and 40% labor/trucking.

And these are just the costs to remove the debris, not total demolition expenses. Following a catastrophe, expect the labor costs for demolition and removal to skyrocket with increased demand.

So, do you recommend and/or quote increased debris removal coverage?

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Bill Wilson

Founder at InsuranceCommentary.com
One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information