Family Business Trashed; Insurance Denied

Timmy Nguyen points to an ordinary ceiling tile and replays an extraordinarily costly night in April.

"They came from the roof," he said.

Nguyen is the owner of T.C. Wash and Dry, a family-run laundromat in San Jose. On the night of April 9, someone ransacked the place.

"Everything was disorganized," he said. "It was a mess."

Nguyen told police the intruder broke a surveillance camera, sawed into two metal change machines and stole the money inside them. 

Not to fear, though. Nguyen had insurance.

Or so he thought.

Nguyen filed a claim for more than $2,000 in losses. But Crusader Insurance denied his claim.

"I think that’s unfair," he said.

Los Angeles-based Crusader said Nguyen’s policy does not cover burglaries. 

The Insurance Information Institute told us most small business insurance policies cover break-ins. The small business administration cautions that "destructive crime, such as theft or burglary, can sometimes cost a business everything."

And yet, Crusader, which advertises that it began in 1985 "specializing in small commercial accounts," sold tiny T.C. Wash and Dry a 71-page policy that makes zero references to covering (or not covering) burglary or theft.

The document specifically excludes coverage for pollution, firearms, dogs, mold, sexual abuse and terrorism -- in writing. But there's no mention of burglary or theft one way or another.

"The coverage grant does not include coverage for theft. Accordingly, there is no need for a theft exclusion," a representative told us.

Nguyen believes that gap is misleading.

"My concern is that the policy should spell out every single one of them," he said. "So, whoever buys insurance can understand what’s going on."

Crusader said Nguyen’s broker should have explained everything, including a revelation that he doesn’t even qualify for burglary and theft coverage because the laundromat doesn’t have an alarm.

We asked Nguyen about that.

"Did anyone explain to you that didn’t have coverage for burglary and you weren’t even eligible for it," I asked.

"No," he said. 

Given the confusion, we asked Crusader if it would reconsider paying T.C.'s claim.

It said no. 

A representative did concede that the policy language could be clearer. He said he would recommend a revision to the company president.