BrickUnderground

We’ve written a lot about bed bugs, notably including the Manhattan co-op with a $250,000 clean-up bill.  

One prominent interior designer we know (whose clients occasionally call on him to manage their extermination effort while they decamp elsewhere) tells us that some white-glove buildings are so worried about contracting bed bugs that they have quietly begun conducting monthly inspections using bug-sniffing canines. 

That sounds smart - and economical.  In addition to footing the cost of building-wide extermination, co-op and condo dwellers are legally responsible for cleaning up the bugs in their own apartment if they brought them into the building.  The pricetag can quickly surpass several thousand dollars per apartment.  

So does insurance cover any of this?

Nope--though some losses can be tax deductible.

“Insurers view it as a maintenance issue, like mold or termites—it’s up to the person who owns the property to maintain their home and make sure there are no bug infestations,” says Loretta Worters, vice president of the Insurance Information Institute, an insurance industry trade association.

Worters directed us to a standard clause that appears in property insurance policies (including renter’s insurance) carving out damages resulting from “birds, vermin, rodents, or insects.”

The only bed bug-related damages that might be covered, she says, would be the medical expenses of someone who sues a policyholder after being bitten in the insured's bedbugged home.

Worters says she's not aware of any plans afoot to introduce bed bug insurance policies.

“It’s such a high risk that I don’t think companies would want to be responsible for that,” she explains. “If they did create it, I’m sure it would be expensive.”

Still, certain bed bug losses can be tax deductible.

Koreen Jervis, president of Korje Tax Professionals in Manhattan, says that if losses exceed 10 percent of your adjusted gross income, you can deduct them.

The problem here is that "losses" are limited to property only -- the infested furniture and goods that had to be discarded, not the cost of the extermination itself.  And losses are also limited to the items' fair market value, not their purchase price or what you spent to replace them.

"So if you paid $20,000 ten years ago, and now the fair market value is only $5,000, that's all you can deduct," says Jervis. 

Related links:

Bed bugged storage (Part 1):  Is your stuff safe?

Bed bugged storage (Part 2): How to protect your stuff

NYC bed bug stats: A vast understatement?

$250,000 bed bugs online; another co-op goes to war

Brooklyn still #1 bed bug borough; Manhattan (UWS & North) next

Co-op hair-raiser: $250,000 bed bug bill

Your neighbor's bed bugs