Pritzker warns insurance companies to speed up paying claims to businesses damaged by looters: ‘Help can’t wait’

Gov. J.B. Pritzker on Monday urged insurers to speed up the paying of claims for small businesses devastated by looters – and warned he’d take action against firms that fail to “do the right thing.”

Underscoring an Illinois Department of Insurance bulletin that went out to the companies, the Democratic governor said he will not “hesitate to hold any bad actors accountable.”

That would mean fines and the suspension of licenses depending on the severity of the situation, Robert Muriel, the department director, said.

“Insurance companies must do everything in their power and are obligated to give their customers the funds,” Pritzker said. “They need to rebuild and get back on their feet, as soon as possible. Help can’t wait.”

“In short, insurers must do the right thing and do it fast with all consideration to assisting business owners to get back up on their feet and reopen as soon as possible,” the governor said. “The Department of Insurance will be paying close attention to any reports of insurance companies not upholding their policies or standing in the way of our business communities rebuilding. I won’t hesitate to hold any bad actors accountable.”

The state is still reeling in the aftermath of widespread looting and vandalism that occurred after the Minneapolis police killing of George Floyd. Despite the hundreds of peaceful protests across the state, some took to the streets to damages businesses that were already struggling to reopen amid the COVID-19 pandemic.

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“There were also those who tried to steal the peaceful voices and influence of this moment by looting and burning and damaging small businesses and private and public property, especially in communities of color,” Pritzker said. “The pain being felt by so many is amplified by the global economic devastation that’s been brought on by the COVID-19 pandemic for our small businesses.”

The bulletin requests that insurers handle claims consistent with the categorization of them stemming from a “catastrophic event.” That would require insurers to expedite claim handling, advance claim payments and treat policyholders fairly “regardless of size.”

Insurers are also being asked to begin a moratorium on the cancellation or non-renewal of impacted policyholders for a period of 60 days. And insurers “should err on the side of the policyholder when paying claims as a result of riots, civil commotion, or vandalism,” the bulletin reads.

Z Couture, a South Side business run by a mother and daughter team, sustained broken windows, stolen cash registers and even damaged mannequins.

“Our hearts are broken when we saw the damage and the vandalism that was performed in our store,” the store’s owner Felicia Goodwin said. “They broke windows, took all of our clothing, damaged racks, undressed and damaged our mannequins. We found our cash register in the street. And they took everything from us.”

Anthony Vazquez/Sun-Times file

Goodwin said she can’t reopen her business without the glass being repaired and the supplies and furnishings replenished.

“Please, insurance companies, come out and assist us so that we can reopen our doors,” Goodwin said alongside Pritzker. “This is an emergency for us and many of the small businesses.”

Jonathan Swain, owner of family-owned Kimbark Liquors in Hyde Park, said his business was looted by “those that use the guise of civil unrest to go to steal and to burglarize us.”

Swain said he first called his wife, then his insurance agent. Swain said he has had a “gracious” experience in being walked through the process of rebuilding after the looting. But he said not all have had the same experience.

Swain said small businesses are operating off cash flow, “and if their doors are closed, they’re unable to succeed.”

“Small business owners, in particular black business owners, do not have the strong balance sheets that they can use, the full cash to use to pay some of these upfront costs,” he said. Swain said he has to pay staff to come back in to get the business ready, replace fixtures and damage and purchase inventory. While insurance may cover that, most businesses need the money now in order to open their doors.

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“I would encourage insurance companies to move quickly, because your decisions are the difference between businesses existing and businesses not existing for generations to come,” Swain said.

The Illinois Insurance Association, a state trade association for property casualty insurance companies, on Monday said insurers are “committed to covering promises made in their insurance contracts and resolving claims as expeditiously as possible.”

But the group warned that the claim process goes “step by step,” with insurers having to do information-gathering, a review and an investigation.

The association is recommending business owners affected by the looting file a police report, contact their insurance agent as soon as possible, take photos and video of the damage, make temporary repairs to protect the property from further damage and review their insurance contract. An inventory of what has been damaged and destroyed is also required.

Businesses can call the Illinois Insurance Hotline at 1-800-444-3338 for help with insurance-related questions.

“Small business owners are skilled, resourceful, creative and employ thousands of workers across the state. Members of the Illinois Insurance Association recognize and value these community champions and stand ready to pay claims as efficiently as possible according to insurance contract terms,” the group said in a statement.