What is Vandalism and Malicious Mischief Insurance (VMM)?
Vandalism and malicious mischief insurance (VMM) is a type of property insurance that covers damages to parts of an insured building or personal property for which the policyholder is responsible. VMM insurance is ideal for buildings that remain unoccupied for an extended period and is suitable for churches, schools, and commercial buildings. Since the structures remain unoccupied for a long period, they are vulnerable to vandalism.
Most homeowner’s and commercial insurance policies contain vandalism and malicious mischief as some of the risks covered by the policy. When looking into insurance coverage options, property owners should seek a comprehensive coverage that lists vandalism and malicious mischief as one of the perils covered.
For example, commercial buildings located in streets with high foot traffic or an area prone to vandalism should consider getting VMM, since the damage can hurt a business’ reputation and incur huge costs in the form of repairs.
- Vandalism and malicious mischief insurance (VMM) protects the policyholder from losses sustained from intentional acts of vandalism.
- The policy covers damages to parts of the insured building and personal property in the property.
- VMM insurance is included in most commercial and homeowner’s insurance policies.
Understanding Vandalism and Malicious Mischief Insurance
Vandalism is purposeful damage caused to another person’s property to cause destruction. Examples of vandalism include spraying graffiti on walls, punching holes in a wall, etc. On the other hand, malicious mischief is damage to property that is caused by spite or hatred.
While vandalism is intentional damage to property, the destruction caused by malicious mischief might not have been intended. Initially, insurers provided coverage for damage caused through vandalism, and it was expanded to include malicious mischief to provide wider coverage to damages that vandalism did not cover.
Vandalism and malicious mischief insurance covers damages to a commercial building or premises for which the policyholder is responsible for, as well as any personal property within the covered building. A large number of damages to property recorded in the United States have been linked to angry ex-spouses seeking revenge by causing damage to property.
Properties that are unoccupied for an extended period during the day often carry a higher deductible due to the high risk and frequency of loss. Although VMM may be provided as a standalone policy, it may be written as an endorsement to a policy for the respective type of perils.
What is Not Covered under VMM?
Vandalism and malicious mischief insurance may only apply in certain instances. The cover may not apply if the insured property was unoccupied for more than 60 days. By vacant, it means that the owner did not reside in the house during the period, and the premises were substantially empty of personal property that is ideal for use.
If a property owner is not present for an extended period, they should take additional precautions that make it difficult for vandals to access the property or commit vandalism. For example, installing surveillance cameras and hiring security personnel to guard the premises can act as a deterrent against acts of vandalism.
Vandalism and malicious mischief may also not apply if the damage or losses from vandalism were due to the acts of an insured party. it means that if a marriage is dissolved, the policyholder should immediately update the policy to reflect the changes in the list of insured persons.
If a disgruntled partner returns to the insured premises and causes damages to the building or personal property, the policy is unlikely to apply because the damage is caused by the insured against another person.
Making a VMM Claim
When a property owner suffers damages or losses due to vandalism and malicious mischief, there are several actions that the property owner should take.
First, as soon as the damage occurs, the property owner should file a police report, and the report should include information on all items, fixtures, and equipment that were damaged in the insured property.
The property owner should take photographs of the damaged items in the property to act as a record, which may be required by the insurer when evaluating the extent of damages suffered.
The property owner can hire a licensed public adjuster to prepare the scope of damages by preparing estimates and inventories to determine the total value of the damages. The scope of the damage is attached to the police report, and it is required when submitting a claim to the insurance company.
Once a claim’s been submitted, some insurers may intentionally deny, delay, or dispute a vandalism and malicious mischief claim. When a policyholder submits a claim, they expect the insurer to initiate the process of claims settlement according to the terms provided in the policy document.
However, some insurers may delay or deny paying valid claims without providing a concrete explanation. If the insurer cannot attribute the damage or losses to the property to fraud or criminal acts, then the policyholder has a case against the insurer. The policyholder can launch a complaint against the insurer through the relevant insurance authority in their state.
CFI offers the Commercial Banking & Credit Analyst (CBCA)™ certification program for those looking to take their careers to the next level. To keep learning and developing your knowledge base, please explore the additional relevant resources below: