There are Many “Victims” of the “Mostly Peaceful Demonstrations”
The Victims of Fires Caused by “Mostly Peaceful Demonstrations”
Posted on June 22, 2021 by Barry Zalma
As I was watching morning news I heard some pundits, who obviously had no idea about insurance, claim that those people whose businesses, buildings and inventories were destroyed by fire, vandalism and theft during the so-called “mostly peaceful demonstrations” were not victims, nor were they harmed, because they were indemnified by insurance. That conclusion is unconscionable and totally wrong on its face. They have never read, let alone, learned from history.
When I was a young man the Watts Riots of the 1960’s destroyed a great part of South-Central Los Angeles. Those whose properties were destroyed who had insurance found it was impossible to rebuild and do business in the area because of the riots and the attitudes of those who destroyed their businesses coupled with the reluctance of the insurance industry to insure any business or structure in Watts. It took more than three decades for the destroyed structures and businesses to begin to be rebuilt.
The reason it took so long was because it is a truism that entering into business or owning a building requires a person or entity to take a risk that it will be lost or destroyed by some contingent or unknown event. The concern is usually about losses from fire, windstorm, hail, lightning, or theft. The risk of loss is so great few individuals or businesses are able to absorb a loss on their own assets. For that reason, insurance exists to spread the risk to many so that there are sufficient assets to indemnify the rare person who incurs a loss. That spreading of risk is the essence of insurance.
To understand why the conclusion that insurance eliminates the status of “victim” of the people whose property is destroyed or stolen it is necessary to understand how insurance works to protect those insured and still make a profit. Insurers use the profession of underwriting to determine what risks to take that, when spread far enough, will allow the insurer to pay all legitimate claims, and still make a profit. Insurers use actuaries, professional mathematicians, to calculate the potential losses a property or series of properties face. With that information they can calculate an appropriate premium to have sufficient funds to cover the anticipated losses. Insurers will not take on a risk of loss that is certain.
Insurers are loathe to write earthquake insurance on the San Andreas fault; to write fire insurance is wildfire zones; to write vandalism insurance for areas inundated with gatherings of unhoused; to write fire insurance for vacant properties; or to write flood insurance on the shore of the Mississippi that traditionally floods every three years. No one, therefore, should be surprised if an insurer – logically – refuses to insure a business against the risk of loss by fire, vandalism or theft in a location where “mostly peaceful demonstrations” were prevalent. When insurers decide it cannot be profitable to write insurance in those locations few, if any, will be willing to invest. It becomes unwise, illogical and impossible for a reasonable insurer to do business in that location.
Riots, Civil Commotion, Civil Demonstrations, or the “Mostly Peaceful Demonstrations” that were prevalent in 2019 and 2020 in many U.S. cities destroyed billions of dollars worth of property. Many of those destroyed were insured. Some were not insured at all. Those who were insured obtained indemnity up to the limits of their policy and even obtained payments for loss of earnings. Those who were not insured lost everything they had invested. Those who were insured were, and are, faced with the need to make the decision to rebuild because they will probably not be able to buy insurance to insure against the risk of loss of the rebuilt property.
What those insured did not receive, after their buildings burned down, was the ability to insure for a reasonable premium the business after rebuilding. What they did not receive was a place to do business for the year or more it took to replace the building destroyed by the “mostly peaceful demonstration.” What they did not receive was protection against the ire of the “Mostly Peaceful Demonstrators.”
When a business is in a location where the physical hazard is increased, like the businesses in Portland, Oregon, New York, NY, Chicago, Illinois, or Minneapolis – St. Paul, Minnesota who have been faced with “mostly peaceful demonstrations” for more than a year and seen business around them burned or vandalized will be indemnified by their insurer.
The prudent insured will take the insurance money, demolish the remains, leave an empty lot and use what is left of the insurance money to start a business in a place where “mostly peaceful demonstrations” are not prevalent and police protection is available and where criminals are prosecuted and jailed.
In addition, what the pundits don’t understand is the fact that there is a large group of victims to the fires and vandalism caused by the “mostly peaceful demonstrators” who burned, vandalized and looted businesses. The true victims of the criminal actions are:
The residents of the community whose property was not destroyed, vandalized or looted because insurance will not be available.
The uninsured small business owners.
The community whose tax base has been reduced.
Every person who purchases insurance in the U.S. since their insurance premium must go up to cover the extra losses.
Every city where the “mostly peaceful demonstrations” occurred because they will not be able to reinstate the destroyed businesses.
Every person whose business was destroyed or damaged by the fires and vandalism and theft.
Every insurance company who insured against the risks of loss of the properties destroyed, damaged or the victims of theft by the thieves who were called “mostly peaceful demonstrators.”
These are not victimless crimes. They destroy the communities, make them uninsurable and make it impossible for the communities to recover. I hope the cities damaged by the “mostly peaceful demonstrations” avoid what kept Watts from being rebuilt. I’m afraid that the if history is repeated the areas destroyed by the “mostly peaceful demonstrations” will not recover for decades.
© 2021 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.
Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
Over the last 53 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.
Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/ podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4