Facts + Statistics: Civil Disorders

Losses

On May 26, 2020, after the death of George Floyd in police custody, protests and riots broke out in Minneapolis, Minnesota and spread over the weeks that followed to another 140 U.S. cities, including Washington, D.C., New York, Chicago, Philadelphia, and Los Angeles. The National Guard was deployed in at least 21 states and Washington, D.C.

The Property Claim Services (PCS) a unit of a Verisk Analytics, designated the civil unrest that took place from May 26 to June 8, 2020 as a multi-state catastrophe event, with over 20 states experiencing significant losses. The 2020 event is the costliest civil unrest in U.S. history with insured losses estimated at over $2 billion by PCS (subject to further evaluation).

This was the first time since 1992 that PCS has compiled significant insured losses for a civil disorder and declared it a catastrophe. PCS had compiled insured losses for the Baltimore, Maryland riots of April 2015 but these riots did not meet PCS’s threshold for a catastrophe (insured losses reaching $25 million) when they occurred.

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.

Outlook

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.

Terrorism

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 $50 billion in 2021 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 $29 billion in 2021 dollars, according to Swiss Re data. Other organizations may have different estimates for this event.

Insurance Coverage

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.

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