Even beyond face-value insurance costs, riots leave a lasting shadow on a city that haunts its economy for decades.
When George Floyd died while in police custody in late May, most agreed his premature death was a tragedy. Yet the discussion on criminal justice reform that emerged in the weeks after Floyd’s passing was quickly overshadowed by the rioting, looting, and violence that broke out in major cities such as Minneapolis, Seattle, and New York.
Dozens of people were killed or injured in the violent unrest, and thousands of businesses and properties, many minority-owned, were looted, torched, or otherwise vandalized. Only now are we beginning to realize the full cost of the destruction. New reporting from Axios reveals that the total insured property losses incurred during the George Floyd riots will come in at $1 billion to $2 billion.
The US has experienced rioting over racial tensions before, but this report shows that the damage from the latest unrest will far exceed any historical precedent.
“The arson, vandalism and looting… will result in at least $1 billion to $2 billion of paid insurance claims,” Axios reports. “[This will] eclips[e] the record set in Los Angeles in 1992 after the acquittal of the police officers who brutalized Rodney King.”
However, there are many reasons that this figure vastly underestimates the true damage wrought by the looting and violence that has broken out in recent months.
For one, the Axios report only measures insured losses. The obvious problem here is that not all the damages were insured.
As I have previously explained, insurance is no panacea for the societal ills imposed by rioting. Indeed, 75 percent of US businesses are under-insured and about 40 percent of small businesses have no insurance at all. Their untold millions in losses don’t show up in the $2 billion figure.
