Want to buy a restaurant or store gift card but fear being stuck if the business never reopens after the coronavirus pandemic?

In a generous move in these uncertain times, Erie Insurance will add gift card and gift certificate reimbursement coverage to its 2.2 million homeowners’ policies at no cost.

Erie says its customers will be reimbursed for remaining balances on gift cards at independently owned local businesses that do not employ more than 100 full-time workers and are located within 100 miles of the customer’s home. Coverage will provide reimbursement for up to $250 per gift card, limited to $500 per policy period.

The card must have been purchased within one year before the business permanently closed. If the business permanently closes after the effective date of the coverage, the customer will be covered even if the card was purchased before the effective date of coverage. For example, a customer in Pennsylvania, where coverage is effective as of May 1, 2020, bought a gift card to a local business on Feb. 15, 2020. The business permanently closes on July 1, 2020. Coverage would apply for this because the business permanently closed after May 1.

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Bob Buckel, an Erie vice president, said a senior executive noted the social-media buzz about restaurants’ selling gift cards to give themselves cash flow and in some cases to help their workers.

“There’s a disincentive to buy gift certificates because [many businesses] are currently closed,” Buckel said. "What if we were to backstop that, to give them confidence so that they can support these local businesses? What a great way for us to show support for local business owners.” Anyone claiming a loss must provide documentation, including the purchase date and original value of the card, the company said.

Buckel said the executive brought the idea to Erie’s product team. The Erie-based company, which writes about 800,000 homeowners policies in Pennsylvania, intends this feature to be permanent.

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The coverage will automatically be added to new and existing homeowner, condo, and renter policies effective May 1 in Pennsylvania, plus Illinois, Indiana, Maryland, Tennessee, Virginia, and Wisconsin. Coverage will be effective on June 1 in Kentucky and West Virginia. The company is working with additional insurance departments to gain approval in its three other states and the District of Columbia.