How will COVID-19-Related Property Foreclosures Affect Property Insurance Claims?

Although government intervention has temporarily slowed a wave of residential foreclosures and evictions stemming from the COVID-19 pandemic, economic pressures are increasingly affecting commercial properties. As vacancies rise, insurance professionals are confronting renewed challenges surrounding the vacancy exclusion—a policy provision that can sharply limit coverage after extended periods of non-occupancy. Case law demonstrates that application of this exclusion varies widely by jurisdiction, underscoring the need for careful analysis, precise policy language, and heightened caution when handling claims involving distressed or vacant property.