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 has compiled insured losses for a civil disorder event since the Baltimore, Maryland, riots of April 2015. Those riots did not meet PCS’s threshold for a catastrophe (insured losses reaching $25 million) when they occurred. For the first time, PCS has 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 as of September 30, 2020, 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
The last civil disorder for which insured losses were collected was an event from April 27-28, 2015, in Baltimore, Maryland, following the funeral for Freddie Gray, a 25-year-old who died after suffering a severe spinal cord injury while in police custody. That event caused $24 million in insured losses, or $26 million in 2020 dollars. The event did not qualify as a catastrophe; see chart below.
Seven of the costliest civil disorders in the U.S. occurred in the 1960s. The first Fair Access to Insurance (FAIR) Plans, designed to provide property insurance in high-risk areas, were developed in response to these events.
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.