Insurance Journal’s Most Noteworthy Topics of 2020: Midwest Region

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COVID 19: Lawsuits and More

Hundreds, if not thousands, of lawsuits have been filed across the U.S. in relation to the COVID-19 pandemic that has gripped the nation and the world this year. The Midwest region has not been spared by the disease or its consequences on peoples’ lives and businesses, nor has the region escaped the litigation arising from the challenges the coronavirus has presented.

While lawsuits against insurance companies over denials of pandemic-related business interruption claims filed by policyholders have garnered a lot of attention this year, actions in the Midwest region also have been filed against employers over COVID-19 safety protocols or lack thereof, against companies following employee COVID-19 deaths and illnesses, and against local and state authorities over virus-related rules and constrictions.

One state, Missouri, even brought suit against the government of China, blaming it for the global pandemic and holding it “responsible for the enormous death, suffering, and economic losses they inflicted on the world, including Missourians.”

Some of the headlines that most captured the attention of readers of IJ’s Midwest news in 2020 include:

Midwest Derecho

A storm packing hurricane force winds hit the U.S. Midwest in August, leaving in its wake not only widespread property damage in cities and towns, but severe challenges to farm economies that were already suffering from previous extreme weather events, the U.S.-China trade war and the COVID-19 pandemic.

Winds as high as 100 miles per hour battered eastern Nebraska, Iowa, Wisconsin and parts of Illinois in the widespread storm classified as a “derecho” by the National Weather Service. By the end of October, losses from the mid-August windstorm that leveled tens of millions of acres of crops had risen to more than $7.5 billion.

Protests

Dan Gutlovics did a lot of virtual hand holding during the first days of the violent protests in Minneapolis and St. Paul following the death of George Floyd while in the custody of Minneapolis police on May 25. Gutlovics, sales executive with Corporate Four Insurance Agency in the Minneapolis suburb of Edina, Minnesota, has commercial insurance clients with businesses in the protest-affected areas. His agency was not directly impacted by the violence but some of his customers’ businesses were. He said he did a lot of consultation with his clients over what coverages and options were available to them.

A man carries items past a burned out Auto Zone store near the Minneapolis Police Third Precinct on May 28, 2020, after a night of rioting and looting over the death of George Floyd. (AP Photo/Jim Mone)

Days of rioting followed Floyd’s death, not only in Minneapolis and St. Paul but in other cities and towns across the country. The Star Tribune reported on June 9 that the total cost of the damage in the Twin Cities alone could rise above $500 million. It is estimated that nearly 1,000 commercial properties were damaged or destroyed in Minneapolis and St. Paul, according to local news sources. The Insurance Information Institute has estimated that damage costs from the rioting in the U.S. may rival the 1992 Los Angeles riots to become the most costly civil disorder in the country’s history.

Michigan Auto Insurance Reform

Michigan, with its requirement that drivers purchase unlimited, lifetime medical benefits with their auto insurance policy, has had some of the most expensive auto insurance in the nation, and auto insurance reform has been a topic of interest to both insurers and insureds in the state for a long time — until this year.

Michigan lawmakers in May 2019 finally passed an auto insurance reform law that allows insureds opt out of buying personal injury protection (PIP) or to choose from six levels of PIP to purchase with their policies. It also required insurers to file a minimum of a 10% reduction in auto premium rates by the time the law came into effect on July 2, 2020. As a result, the state’s drivers are expected to see a big drop in insurance premium rates, a larger one even than is required by law, according to Michigan Gov. Gretchen Whitmer and Anita Fox, director of the state’s insurance department.

Agent Fraud

Stories about the crimes and misdemeanors that others commit (or are at least accused of) are the stuff of which news organizations are made, apparently. And insurance news organizations are no different judging from the amount of interest generated by the numerous accounts of agent fraud allegations and/or convictions in IJ’s Midwest region in 2020. Obviously, agent fraud was not limited to just one state — a variety of Midwest jurisdictions were represented in the fraud reports that that IJ readers clicked on this year: