Courtesy of a link provided by the always useful Second City Cop blog, we learn that riot-hit businesses in Portland can no longer get affordable or sufficiently comprehensive insurance cover.
Eric Murfitt watched helplessly from a live security feed as looters trashed his downtown clothing store, Mercantile, during a riot on May 30. Murfitt said the business suffered $1 million in losses due to the break-in and had to file an insurance claim to stay afloat.
But in November, Murfitt was informed that his insurance carrier would not be renewing the store’s policy. Nearly a dozen other insurance companies declined to even offer Mercantile a quote.
So earlier this month, Murfitt settled for a policy that nearly quadrupled his premium, had a significantly higher deductible, included a much smaller cap on coverage related to robbery and excluded any property damage related to civil unrest.
“We’re effectively uninsured right now,” Murfitt said. “And we’re paying four times as much for the privilege.”
. . .
Jessica Getman, president of Brown & Brown Insurance Northwest, said that some insurance carriers have placed moratoriums on issuing new commercial insurance policies or increasing coverage for existing customers in downtown Portland, creating a barrier for anyone trying to open a new business. She said ... owners who have had to file claims for property loss and damage this year could have a harder time renewing their policies or finding affordable options that offer property coverage. Business owners both in downtown and elsewhere in Portland where there have been instances of vandalism say they’ve run into this issue.
. . .
Barb Schimmel, a senior sales executive at WSC Insurance ... recently received a notice from an insurance carrier saying they would not offer a new policy to a business they did not already insure or offer increased coverage to a business they currently insure if it operated “within 5 miles of active riots/looting.” Schimmel said it was not clear how the carrier would define those terms.
There's more at the link.
One can't blame the insurance companies, of course. They're in business to make a profit. That includes assessing the risks confronting their clients. If that risk is too high, the odds of their making a profit on the client's premiums are too poor - so they won't insure them. It's a straightforward business decision.
However, the progressive left doesn't see it that way. They'd love to force insurers to cover everybody at "averaged" rates, so that a business in a riot-hit city and one in a peaceful small town are covered at much the same rates. Effectively, the safer business would subsidize the more at-risk one by paying higher premiums. There's also the option to force insurers to continue coverage even if the risk has increased, or a major claim has been made. California did this with fire insurance policies last year, forcing insurers to continue to offer coverage even if it was no longer economical for them to do so. The state wasn't bothered in the least by the increased business risk to the insurance companies.
One obvious answer, from the insurers' point of view, is to limit the amount they can lose. Minneapolis businesses found this out the hard way earlier this year.
One day after rioters destroyed the Sports Dome retail complex in St. Paul, a construction crew hired by the city knocked the building down because it was dangerously unstable.
Then the city presented the property owners with a $140,000 bill for what it would cost to haul away the debris.
“We were really upset about that,” said property owner Jay Kim, whose insurance policy covers a maximum of $25,000 in demolition costs. “We thought that was high. But we didn’t know how much demolition would cost at the time.”
Like dozens of other investors whose properties were severely damaged in the May riots, the Kim family was stunned to discover that the money it would collect from its insurance company for demolition won’t come close to the actual costs of doing the job. Most policies limit reimbursement to $25,000 to $50,000, but contractors have been submitting bids of $200,000 to $300,000. In many cases, the price of the work is not much lower than the actual value of the property, records show.
. . .
Contractors acknowledge that prices for riot-related work are far higher than usual, but they said that is because government regulations require them to treat all debris from a burned-out building as hazardous. Industry veteran Don Rachel said those rules can double demolition costs.
“We aren’t taking advantage of anybody,” said Rachel, CEO of Rachel Contracting, one of the largest demolition contractors in the state. “Some people might have sticker shock, but how do they know? Most of these folks have never had to wreck a building.”
Demolition costs are so high that many rebuilding projects remain stuck in neutral, leaving large sections of Minneapolis and St. Paul with scorched buildings and piles of rubble that will linger for months.
Again, more at the link.
The risk to businesses from crime, violence and unrest is very real in most larger cities. I've put up photographs of boarded-up businesses and looted stores on this blog on several occasions. The Chicago Tribune points out:
The coronavirus pandemic and a summer of unrest have thinned the usual bustle of Boul Mich down to a trickle of foot traffic, as tourists stay away and office workers have shifted to their dining room tables.
On a recent weekday, the plazas were empty. The storefronts — the ones still open — carried signage about mask requirements and customer limits that made each door feel like a risky proposition. To shop is to feel “normal,” but at what cost? The clerks inside looked lonely.
. . .
On a recent walk down the Mag Mile, we counted 34 of 108 storefronts closed, most permanently and many boarded up. People we spoke to said it’s “dangerous” to stay after dark, and almost all of the shops now close by 6 p.m.
If consumers won't spend their money in at-risk businesses, how are those businesses going to afford even restricted insurance coverage? And will their suppliers continue to supply them if the goods they send aren't adequately covered against loss?
As Second City Cop concludes:
Insurance Companies don't exist to lose money, and the trend for libtards, race baiters, and social justice warriors is to say, "Hey, they're insured. Loot away!" is about to meet a cold hard reality.
Everywhere is about to be Detroit 2.0.
I'm expecting the "next big thing" from progressive left-wing politicians will be government-guaranteed insurance. Insurance companies will be forced to issue policies, but will themselves be insured by federal government guarantees against losses. Ultimately, of course, that means we taxpayers will be on the hook (whether we like it or not) for yet more unsustainable, unjustifiable government debt.