Insurance coverage at risk for Seattle businesses hit hard by property crime

SEATTLE — A spike in theft and vandalism has many Seattle business owners eating the losses instead of filing insurance claims because they fear their coverage will be dropped.

A coalition of business groups turned to city councilmembers this week to help address these insurance concerns. The broken windows and break-ins are pushing the limits of their policies, they said, and could force them to close-up shop.

Steele Barber in Ballard got off to a rough start after it first opened in late 2020. Criminals smashed into the upscale salon and spa, stealing thousands of dollars in goods and causing extensive damage.

“The big challenge was I thought that's what theft insurance was for so I used it and was promptly dropped,” Humphrey said.

As a broker helped Humphrey search for a new company to provide coverage, Humphrey was shocked not only by the lack of options for businesses operating in Seattle but also by the price.

“It's costing me $3,000 or $4,000 more a year,” Humphrey said.

Businesses overwhelmed by Seattle's mounting crime turned to the city council this week and among the requests was help with insurance. Dan Austin, owner of Peel & Press in West Seattle, was among those who testified during the roundtable discussion.

“I was broken into twice in the first year of the pandemic,” Austin said. “Those two break-ins were not covered by insurance because they were just below the threshold that made it worth it and those are the differences from me breaking even to losing money."

Since the initial break-in, Humphrey has dealt with another five incidents that left windows smashed, doors busted and merchandise missing. He paid out of pocket to cover the losses, wanting to save his insurance for a catastrophe.

“My year to date net loss is a little over $25,000 which for me is a big deal as a small business," he said.

Humphrey is investing in his staff. Last week his workers stopped a man armed with a wrench before he could attack a woman passing by outside the salon. To help, Humphrey has hired a retired ATF agent to train those workers to better handle the violence that sometimes takes place right outside.

“So we're going to do a whole team meeting on security because it's gotten worse in the last year,” Humphrey said. “His expertise is on de-escalation, what you do in those scenarios so they know how to react."

City councilmembers are now considering several requests regarding the property crime and insurance challenges. Businesses are asking for a grant program to help pay for repairs. Such grants have ranged from $500 to $5,000 in recent pilot programs.

Business owners also want a study to compare insurance rates and availability across different neighborhoods. The study could identify unfair burdens on certain areas or businesses so insurance access can be more equitable, they said.