Business Booms For Specialty Insurers Issuing Coverage On Empty Detroit Houses, Buildings; Lapse Of Standard Coverage A Risk When Property Left Vacant

In Michigan, Crain's Detroit Business reports:

• Business is booming for specialty insurers who write policies on the increasing number of vacant houses and buildings in metro Detroit. Vacancy rates for buildings have been increasing in metro Detroit at a faster rate than in Michigan and nationally, caused by bank foreclosures, increasing unemployment and a downturn in the real estate market. “With Michigan's economy in turmoil, you cannot drive anywhere in the state and not see "for sale' signs, "foreclosed' signs or empty storefronts and homes,” said Alan Jay Kaufman, chairman, president and CEO at Burns & Wilcox, a Farmington Hills-based broker.

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• Some owners are not aware of the need for special vacant-property coverage, Kaufman said. While policies vary, standard homeowners or commercial insurance generally does not cover a property 30 days after it is vacant, he said. “Commercial people know they need this insurance. Most homeowners do not know they need special insurance if they are selling their own property and vacate it,” Kaufman said. Business owners and homeowners of vacated properties could incur big out-of-pocket losses with a fire, vandalism, water damage or theft, Kaufman said.

• [Executive director of the Insurance Institute of Michigan Pete] Kuhnmuench said the high foreclosure rate in Detroit makes it more likely that homeowners and business owners will just walk away from their property. “We hear stories all the time from insurance agents about people who did not have proper coverage and lost everything due to a fire or crime,” Kaufman said. “People left their home and did not tell their insurance agent.”

For more, see Vacancy rates spur growth of policies for empty buildings. foreclosure arson xerox