Go figure. What insurer wouldn’t love to issue policies in cities where, ah … [checks notes] … rioters controlled the streets for months on end, separatists harassed and extorted business owners, and prosecutors refused to bring cases when malefactors did get arrested at all?

Shorter ask: What insurer wants to go broke while others get woke? None, as it turns out in Portland:

Commercial insurance premiums were rising even before the coronavirus, while coverage was decreasing. The pandemic exacerbated those trends. Premiums for commercial property and casualty insurance increased by an average of almost 11% in the second quarter of 2020, according to the Council of Insurance Agents & Brokers.

But brokers say insurance companies have become particularly wary about covering Portland businesses, especially those downtown, as ongoing protests have given the city a reputation for upheaval and led to a spike in vandalism and destruction, often committed by a small group of people. …

Jessica Getman, president of Brown & Brown Insurance Northwest, said that some insurance carriers have placed moratoriums on issuing new commercial insurance policies or increasing coverage for existing customers in downtown Portland, creating a barrier for anyone trying to open a new business. She said it is not uncommon for carriers to place temporary pauses on issuing new policies in areas where there is a perceived increased risk, such as when there are wildfires nearby.

While Getman said most insurance carriers aren’t walking away from existing customers in downtown Portland, she said owners who have had to file claims for property loss and damage this year could have a harder time renewing their policies or finding affordable options that offer property coverage. Business owners both in downtown and elsewhere in Portland where there have been instances of vandalism say they’ve run into this issue.

“The civil unrest and riots that have occurred have put Portland on the map,” Getman said. “We’re talking about insurance carriers that not only have a footprint here in Oregon, but nationally, and many are based outside of Oregon. So, they are seeing all of this heightened awareness of crime and damaged buildings over the news. That has made carriers more sensitive.”

No kidding. Insurance carriers manage risk by pooling large groups of people in order to allow for the occasional need to invoke coverage. They don’t stay in business long by re-insuring businesses in the middle of riots or in places where crime waves have spiked. The latter on its own requires a much higher assessment of risk, and not just in business insurance, either. Minneapolis residents — and those in the suburbs — might get some unpleasant surprises when it comes to auto insurance after carjackings went up by 537% this year.

And that’s not limited to Minneapolis or Portland either:

The assault on Williams, captured on surveillance video recently released by the Chicago police in an effort to identify and catch his killers, focused attention on a dramatic spike in carjackings there. In all of 2019, there were 501 incidents of that crime. So far that number has more than doubled to 1,125 this year, according to the latest Chicago police statistics.

But Chicago is neither the only nor the worst example of this disturbing crime trend. Minneapolis police report that carjackings there have shot up 537% this year. Carjacking calls to 911 in New Orleans are up 126%. Oakland police cite an increase of 38%. And while many police departments do not keep carjacking-specific numbers, instead classifying them as auto theft or armed robbery, crime experts like Chris Herrmann, a professor at John Jay College of Criminal Justice, say anecdotal reports of a carjacking surge are coming in from metropolitan areas around the country including Milwaukee, Louisville, Nashville and Kansas City.

Data for auto theft is easier to come by and, according to Herrmann, the numbers show that crime is also spiking in many cities this year, including a rise of 68% in New York, 36% in Los Angeles and 34% in Philadelphia. But carjackings draw attention as the violent, potentially fatal version of auto theft.

That rise in crime and the necessity of increased payouts means that the risk pool has to contribute more to cover those losses. Those costs are assessed by specific risk attributes, very much including the location of the property to be ensured. It doesn’t matter, as the Oregonian attempts to argue above, that these crimes are only being committed by a “small number of people.” It’s that the large number of crimes, and the damage they do, is exponentially larger than it was a year ago. Either insurers have to increase the premiums in those areas to anticipate the risks, or simply stop doing business in those places altogether.

The efforts to defund the police in these cities are going to make insurers even more skittish. In Portland, though, the Multnomah County prosecutors refuse to prosecute these criminals even when police do apprehend them. The political leadership in that county, and especially in Portland, have all but advertised impunity for property crimes in their jurisdiction. Why should anyone be surprised when insurers tell their constituents not to expect coverage for future business losses?

This won’t end with Portland, either. Insurers are going to be very careful about policies they write for urban locations in the future. If cities want to revitalize their inner cores and attract businesses and jobs, they’d better start enforcing the law. Otherwise, no one will invest money in those jurisdictions, and no one will create jobs for those citizens as a consequence. It will take decades for these cities to recover from the damage they are doing to themselves in 2020.