On May 26, 2020, after the death of George Floyd in police custody in Minneapolis, Minnesota, protests and riots broke out in that city and spread over the next weeks to another 140 U.S. cities, including Washington, D.C.; New York, New York; Chicago, Illinois; Philadelphia, Pennsylvania; and Los Angeles, California. The National Guard were called in at least 21 states and Washington, D.C. The Property Claim Services (PCS) a unit of a Verisk Analytics, designated the riots in Minneapolis a catastrophe, the first time that PCS had compiled insured losses for a civil disorder event since the Baltimore, Maryland, riots of April 2015. The Baltimore riots did not meet PCS’s threshold for a catastrophe (insured losses reaching $25 million) when they occurred. For the first time, PCS designated the civil unrest in Minnesota and those events that followed across the United States from May 26 to June 8 as a multi-state catastrophe event. This makes the 2020 event the first time since 1992 that PCS has compiled significant insured losses for a civil disorder and declared it a catastrophe. PCS has included more than 20 states with significant losses for this catastrophe. A preliminary estimate of insured losses from PCS which is still subject to further evaluation, would be more than $1 billion, marking it as the costliest civil disorder in U.S. history.
The second costliest U.S. civil disorder occurred from April 29 through May 4, 1992, in Los Angeles, California, after a jury acquitted Los Angeles Police Department officers for using excessive force in the arrest and beating of Rodney King. The event caused $775 million in insured losses, according to PCS, or about $1.4 billion in 2020 dollars. For more information on Civil Disorders, see Facts + Statistics, Civil Disorders.
Political risk exposure will be dominated by global civil unrest over the next two years, according to the Allianz Risk Barometer 2021. Businesses around the world are concerned about unrest stemming from Covid-19 pandemic lockdowns. Physical damage, business interruption and loss of revenues are significant risks if protests break out in the United States. The retail sector is particularly exposed, as pointed out in the Allianz Spring 2021 Global Risk Dialogue.
Nearly 3,000 people perished in the September 11, 2001, terrorist attacks in New York, Washington and Pennsylvania, excluding the 19 hijackers. Total insured losses from the terrorist attacks on the World Trade Center in New York City and the Pentagon were about $47.0 billion in 2019 dollars, including property, life, and liability insurance claim costs. It is the worst terrorist attack on record in terms of fatalities and insured property losses, which totaled about $27.1 billion in 2019 dollars, according to Swiss Re data. Loss estimates may differ from estimates calculated by other organizations.
Auto: Damage to cars is covered under the optional comprehensive portion of an auto policy. It provides reimbursement for damage to the vehicle and its contents caused by fire, falling objects, vandalism or riot.
Home: Standard homeowners policies will cover damage to the property and its contents caused by fire, an explosion, a riot or civil commotion, vandalism or malicious mischief.
Business: Damage to the physical plant of a business and its contents caused by fire, riots, civil commotion or vandalism is covered under a Business Owners Policy (also known as a BOP).
For more information on insurance coverage, see the Triple-I article, Civil disorders and insurance.