task0778
Diamond Member
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.
āThe arson, vandalism and looting... will result in at least $1 billion to $2 billion of paid insurance claims,ā Axios reports. ā[This will] eclips[e] the record set in Los Angeles in 1992 after the acquittal of the police officers who brutalized Rodney King.ā
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.
.... 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 donāt show up in the $2 billion figure.
So, too, insurance doesnāt account for the personal pain and suffering caused by rioting. For example, what about the more than 15 people who died during the unrest? Their lives and their familiesā pain donāt get counted in any insurance companyās budgetary analysis. Nor does the pain of those such as an elderly businessman punched in the face while his store was ransacked in Kenosha, Wisconsin manifest itself in total reports on insurance compensation.
Moreover, looking at mere insurance totals fails to factor in the lost sales revenue and unpaid labor that businesses victimized by rioters face.
And thatās all without even considering the long-term economic impact rioting has on a community. We must also remember that riots leave a lasting shadow on a city that haunts its economy for decades. The afflicted areas face higher insurance rates, lower property values, higher prices, reduced tax revenue, and decreased economic opportunity.
As Iāve previously summarized, ample research confirms this:
One study of the 1992 Los Angeles riots concluded that not only did the destruction cause $1 billion in initial property damage, over time it led to an economic decline of $3.8 billion in sales activity and at least $125 million in tax revenue.
Moreover, a 2005 study examining similar riots in the 1960s found ānegative, persistent, and economically significant effects of riots on the value of black-owned housingā to the degree of āa 10 percent decline in the total value of black-owned property in cities.ā
And seeing as the new reporting shows that the George Floyd riots were more destructive than the riots in either of the above periods, we can reasonably expect that the long-term economic consequences will be more severe as well.
This important reality shouldnāt be overlooked.
Guess who is actually going to pay for that $2 billion in insurance claims? Answer: the rest of the insured, when insurance rates go up on everybody. And beyond all that, the trust in local gov'ts has to be negatively affected; they let their citizens suffer losses, injuries, and even death, and they did it for political reasons. Consider: who in their right mind would start a new business in a place where you don't know if the police will show up to protect you, your family, and your property? They could have called in the NG and put an end to the riots and destruction when it first started, but they did not. Anybody want to argue that it wasn't politics? It's one thing to allow peaceful protests, but it's another thing entirely to allow protests to turn into riots, violence, and destruction of public and private property.
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.
āThe arson, vandalism and looting... will result in at least $1 billion to $2 billion of paid insurance claims,ā Axios reports. ā[This will] eclips[e] the record set in Los Angeles in 1992 after the acquittal of the police officers who brutalized Rodney King.ā
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.
.... 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 donāt show up in the $2 billion figure.
So, too, insurance doesnāt account for the personal pain and suffering caused by rioting. For example, what about the more than 15 people who died during the unrest? Their lives and their familiesā pain donāt get counted in any insurance companyās budgetary analysis. Nor does the pain of those such as an elderly businessman punched in the face while his store was ransacked in Kenosha, Wisconsin manifest itself in total reports on insurance compensation.
Moreover, looking at mere insurance totals fails to factor in the lost sales revenue and unpaid labor that businesses victimized by rioters face.
And thatās all without even considering the long-term economic impact rioting has on a community. We must also remember that riots leave a lasting shadow on a city that haunts its economy for decades. The afflicted areas face higher insurance rates, lower property values, higher prices, reduced tax revenue, and decreased economic opportunity.
As Iāve previously summarized, ample research confirms this:
One study of the 1992 Los Angeles riots concluded that not only did the destruction cause $1 billion in initial property damage, over time it led to an economic decline of $3.8 billion in sales activity and at least $125 million in tax revenue.
Moreover, a 2005 study examining similar riots in the 1960s found ānegative, persistent, and economically significant effects of riots on the value of black-owned housingā to the degree of āa 10 percent decline in the total value of black-owned property in cities.ā
And seeing as the new reporting shows that the George Floyd riots were more destructive than the riots in either of the above periods, we can reasonably expect that the long-term economic consequences will be more severe as well.
This important reality shouldnāt be overlooked.
George Floyd Riots Caused Record-Setting $2 Billion in Damage, New Report Says. Hereās Why the True Cost Is Even Higher | Brad Polumbo
According to new reporting, the post-George-Floyd riots caused up to $2 billion in insured property damage. This sets a new record compared to past riots in American historyābut the figure actually underestimates the true economics costs. Hereās why.
fee.org
Guess who is actually going to pay for that $2 billion in insurance claims? Answer: the rest of the insured, when insurance rates go up on everybody. And beyond all that, the trust in local gov'ts has to be negatively affected; they let their citizens suffer losses, injuries, and even death, and they did it for political reasons. Consider: who in their right mind would start a new business in a place where you don't know if the police will show up to protect you, your family, and your property? They could have called in the NG and put an end to the riots and destruction when it first started, but they did not. Anybody want to argue that it wasn't politics? It's one thing to allow peaceful protests, but it's another thing entirely to allow protests to turn into riots, violence, and destruction of public and private property.
