Consumer Confidential: Stores may be insured for looting. But guess who pays in the end (hint: you)

David Lazarus, Los Angeles Times on

Published in Business News

Randle Frankel, who runs a commercial-property insurance brokerage with clients throughout Los Angeles County, could only shake his head when some people looting stores over the weekend said this won't hurt anyone because the businesses are insured.

Yes, most retailers are covered for such criminal activity, Frankel told me, but not necessarily for total damage or losses. As with all insurance, it depends on how much coverage they've purchased.

Moreover, the buck doesn't stop with the insurance company.

"If carriers are paying out claims for hundreds of millions in losses, they're going to try and recoup," Frankel said. "There will be repercussions. Rates will go up."

Higher insurance rates inevitably will be passed along to customers in the form of higher retail prices, which means, going forward, higher out-of-pocket costs for sneakers, clothing and other goodies obtained without a five-finger discount.

Which is to say, looting is not a victimless crime, as some have tried to argue in defending such behavior.


It has very real consequences for business owners and, in turn, their customers. In the long run, we all pay.

"In my experience, after every event like this, there will be price increases," Frankel said. "Rates have to go up."

In case it needs underlining, the theft and vandalism have nothing to do with the largely peaceful protests over the death of George Floyd. This is criminal behavior, full stop.

My colleagues Sam Dean, Laurence Darmiento and Ronald D. White did a good job outlining how not all landlords require commercial tenants to insure their inventory.


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