Insured Losses from Vancouver Riot Being Assessed

Posted on Jun 17, 2011 by Sergio Ulloa (G+)

Insurance adjusters have begun the difficult task of calculating damage estimates in the aftermath of one of Canada's worst riots in decades. On Wednesday, fires, looting, rampant destruction and hundreds of arrests and injuries played out on the streets of downtown Vancouver, British Columbia as chaos erupted in the moments after the local team, the Canucks, lost the Stanley Cup final, ice hockey's championship series, 4-0 to the Boston Bruins at Rogers Arena. Until the penultimate Game 7, the home team had won each game of the series. Tens of thousands of people who had gathered downtown throughout the day in anticipation of the city's first Stanley Cup victory were witness and participant to a four-hour rampage upon the disappointing result of the event. Jim Chu, the chief constable of the Vancouver Police Department, told the media that about 100 people had been arrested, and that number was expected to grow. Many of the rioters failed to mask their identities, and the police have asked the general public to send in videos and photo evidence to help identify perpetrators. On the night of the riots, Vancouver Mayor Gregor Robertson issued a statement condemning those who participated in the riot as a fringe criminal element: "It is extremely disappointing to see the situation in downtown Vancouver turn violent after tonight's Stanley Cup game. Vancouver is a world-class city and it is embarrassing and shameful to see the type of violence and disorder we've seen tonight." The widespread rioting and looting left dozens of cars burned, public property damaged and shopfront windows shattered over a 10 block radius surrounding Vancouver's main commercial and entertainment district. The Downtown Vancouver Business Improvement Association has estimated that over 50 businesses have suffered some degree of damage during the riots. The association is not yet certain what the total cost of the damage and looting will be or whether their standard commercial insurance policies will provide ample coverage. According to AllWest Insurance Services Ltd, business owners should be covered for losses related to fire, inventory theft and vandalism issues. The Vancouver-based insurance brokerage claimed however that damages related to disabled storefront windows may be more complicated as their contract is typically tied to the glass companies, which often exclude adverse events such as riots, crime and terrorism in their policies. Regardless of coverage issues, this was a very inconvenient situation for many Vancouver businesses. Kelly Dale, Vice President at AllWest, explained "All of these business owners are dealing with the shutdown today and clean-up, so they're all affected even if they have insurance." Local insurance companies now have their hands full investigating the plethora of damages. After surveying a portion of their downtown Vancouver insured properties, James Clay, President of J.T. Insurance Services, remarked to the press "There is a substantial amount of damage½It is going to be in the millions." Adam Grossman, spokesman for The Insurance Corporation of British Columbia (ICBC), told reporters that they already had 25 claims filed due to the riots, with many more likely to come. The worst damage reported thus far has involved cars being set on fire or flipped over for a total loss. "Unfortunately, a lot of those vehicles are total loss vehicles now and typically, when a vehicle's rolled onto its roof, just the sheer weight of the vehicle will come down on the roof and you know that in almost every case that vehicle won't be repaired, it will be a total loss," Grossman explained. At least 17 vehicles were torched including two police vehicles. The influx of vehicle-damage reports has necessitated ICBC's implementation of a temporary special claims office, which will work with police to both process auto claims and identify potential vandalism suspects. ICBC will cover all policyholders who have taken out comprehensive insurance covering events such as vandalism and fire. Grossman concluded that it was still too early to get a figure on the total damage incurred. Hockey riots are not unheard of in Canada. In 1994 after the Canucks lost the Stanley Cup to the New York Rangers, rioting occurred in Vancouver, resulting in 200 injuries and CAD 1.1 million (US$ 1.12 million) in damages. This week's events are expected to eclipse those totals. The ultimate price of this lunacy is not just the insurance deductibles. The local real estate market and even Vancouver's recent goodwill as a tourist destination may be effected. While we often associate such scenes of civil unrest with more politically tenuous areas of the world, the impact such events can have on the global insurance market remain just as significant.