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Friday, September 25, 2020

Rioting in 140 cities after George Floyd’s death will cost insurance industry $2 BILLION

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The rioting, looting, and arson that was seen in some 20 states in the days and weeks following the May 25 police killing of George Floyd in Minneapolis could cost the insurance industry up to $2billion in claims, it has been reported.

The previous record for the costliest period of civil unrest in insurance history was set in 1992, when Los Angeles was engulfed in violence for a week after the acquittal of four police officers filmed in the beating of Rodney King.

The Los Angeles riots resulted in $775million in insurance claims being paid out.

When taking inflation into account, that would amount to $1.42billion, according to Axios.

Other costly instances of civil unrest include the 1965 Watts riots in Los Angeles ($44million); the 1967 riots in Detroit ($42million); and the rioting and looting that took place during the 1977 blackout in New York City ($28million).

People walk past a store that was looted during a riot following a rally expressing outrage over the death of George Floyd on May 30 in Seattle. Insurance companies will pay out up to $2billion in claims for property damage caused during the nationwide rioting

People walk past a store that was looted during a riot following a rally expressing outrage over the death of George Floyd on May 30 in Seattle. Insurance companies will pay out up to $2billion in claims for property damage caused during the nationwide rioting

Rioters burn and loot an Office Depot on May 29 in Minneapolis. The unrest following Floyd's death was the costliest in insurance history

Rioters burn and loot an Office Depot on May 29 in Minneapolis. The unrest following Floyd’s death was the costliest in insurance history

There were riots, vandalism, looting, and arson in some 140 cities in the days and weeks following Floyd's death. A police vehicle in Pittsburgh was set on fire on May 25

There were riots, vandalism, looting, and arson in some 140 cities in the days and weeks following Floyd’s death. A police vehicle in Pittsburgh was set on fire on May 25

People run off with merchandise from a store during widespread protests and unrest in response to the death of George Floyd in Santa Monica, California, on May 31

People run off with merchandise from a store during widespread protests and unrest in response to the death of George Floyd in Santa Monica, California, on May 31

Floyd died in the custody of the Minneapolis Police Department on May 25

Floyd died in the custody of the Minneapolis Police Department on May 25

The data was compiled by Property Claim Services, a firm that has kept track of insurance claims as they relate to civil unrest since 1950.

The company considers any riot that results in more than $25million in insured losses as a ‘catastrophe.’

PCS estimates were arrived at by assessing damage caused during the period between May 26 and June 8.

While other riots caused significant damage, the events that followed Floyd’s death were unprecedented in scope.

The unrest spread to some 140 cities in at least 21 states as well as the District of Columbia.

The previous record held for most destructive riots that caused the most property damage was the 1992 riots in Los Angeles

The previous record held for most destructive riots that caused the most property damage was the 1992 riots in Los Angeles

COSTLIEST RIOTS IN US HISTORY 

Nationwide George Floyd riots $1-2B

Los Angeles, 1992, $775million

Miami, 1980, $65million 

Los Angeles, 1965, $44million

Detroit, 1967, $42million 

New York City, 1977, $28million

Washington, DC, $24million

Newark, 1967, $15million

Baltimore, 1968, $14million

Chicago, 1968, $13million 

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In at least 40 cities, authorities imposed curfews and at least six people were killed.

The National Guard were called in to help in some 21 states as well as Washington, DC.

Experts warn that continuing racial tensions could result in even more insurance claims.

The head of the fire department in Kenosha, Wisconsin, says damage from the unrest over the August 23 police shooting of Jacob Blake has now topped $11million.

Fire Chief Charles Leipzig told the Police and Fire Commission Tuesday that the record fire loss came in the days following the shooting of Blake, a 29-year-old Black man who was left partially paralyzed after a white officer shot him seven times in the back.

‘To put into context, that’s three years of fire loss for us in the span of about a week,’ Leipzig told commissioners, the Kenosha News reported.

The shooting, which was recorded on video, sparked protests and violence in Kenosha, where roughly two dozen fires were set and numerous businesses were destroyed.

Prosecutors say 17-year-old Kyle Rittenhouse of Antioch, Illinois, shot three demonstrators, killing two of them, during a chaotic protest on August 25.

Last month, rioting erupted in Kenosha, Wisconsin, after a white police officer shot a black man, Jacob Blake, 29. President Trump is seen left touring the affected area in Kenosha on September 1

Last month, rioting erupted in Kenosha, Wisconsin, after a white police officer shot a black man, Jacob Blake, 29. President Trump is seen left touring the affected area in Kenosha on September 1

Property damage resulting from rioting or civil unrest generally are covered under standard auto, business, and homeowners insurance policies, according to the Insurance Information Institute.

But the claims paid out by insurance companies over the years in the wake of civil unrest pale in comparison to those related to natural disasters.

Insurance companies paid out a total of $219billion worldwide for natural disasters in 2017 and 2018, according to Swiss Re.

In California alone, insurance companies paid out $20billion in claims during those two years after wildfires devastated the state.

This year’s wildfires in California are the most damaging on record as 2.2 million acres have gone up in flames – even as the season still has weeks to go. 

RMS, a risk strategy company, estimates that insured losses caused by Hurricane Isaias will range from $3billion to $5billion. 

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