When state officials held a meeting at Midtown Global Market offering free insurance claim advice for Minneapolis businesses damaged during the civil unrest sparked by George Floyd’s killing, the room filled quickly and a line went out the door.
With millions of dollars in damage along the Lake Street corridor, mainly to businesses owned and operated by immigrants in the East African and Latino community, merchants want to make sure they are following the right steps to get back on track.
Moe Amaro operates three tobacco shops on or near Lake Street. One, Quality Tobacco in Whittier, was burned to the ground. The others, Uptown Tobacco in The Wedge and Hennepin Tobacco in East Isles, had most of their inventories stolen. Amaro, who said he blames Mayor Jacob Frey and Gov. Tim Walz for not protecting the city during the unrest, has filed insurance claims, but he hasn’t heard back yet and is worried his coverage may not be enough.
“We’re waiting, we’re seeing what the city is doing,” Amaro said.
But that could be a long wait. While Minneapolis officials at Midtown said people should expect support from the city, municipal aid won’t come soon.
“Don’t expect we will have answers and solutions quickly,” said Erik Hansen of the city’s Community Planning and Economic Development department.
Monica Romero, a CPED worker at the Midtown event, told business owners damaged buildings will have property tax relief from the assessor’s office and that damaged businesses won’t be bothered about city licenses for now.
Rebuilding costs have been estimated at $100 million to over $500 million. Getting a firm figure on the damage “is going to take a long time,” Hansen said. Much of the damage is to private properties and businesses that have a range of insurance policies and companies.
“An insurance claim can be straightforward, but it often is not,” said Margo Brownell, a partner with Maslon LLP, a Minneapolis law firm that is assisting people impacted by the unrest pro bono.
Brownell, who specializes in insurance claim litigation, said claims from the unrest are mostly at early stages right now and could take up to a year to be resolved. The worst cases, of total loss, are often the easiest, she said, because insurers simply pay out the limit of the policy. For most people her firm has helped, the insurance companies have been good to deal with, Brownell said.
But she has also noticed a number of issues, including a large amount of underinsurance. Most people have coverage for their building, coverage for their wares and coverage for income lost, but not everyone has all three. Merchants vary in how well they have documented inventories and how well their insurance policies have kept up with their businesses over the years, Brownell said.
One business owner who reached out to Brownell had an insurance company that wanted to run a credit check on them before processing their claim, which shouldn’t happen, she said. Many people who contact the firm want to get a full understanding of their policy and double check the policy against adjuster claims, she said.
“If they feel like there’s a lot happening [that] they are not understanding, they should seek help,” Brownell said.
In addition to the Maslon firm, the University of Minnesota Law School has a clinic specializing in insurance law that may be able to assist people with claim questions.
Representatives from the Minnesota Department of Commerce, which organized the meeting at Midtown, told business owners the state can help them file claims. The state advised businesses to file their claims immediately and offered some general tips on how to best go through the process. If businesses have claims denied or don’t feel the process was fully resolved, owners can file a complaint with the Commerce Department, which can try to settle the dispute in formal or informal ways.
But not every impacted business owner around Lake Street has insurance. Tomasa Cortez, who owns Joyeria Ashley in Plaza Mexico, said she has no insurance that can help her replace a door that was broken in the unrest. But she said she will be able to get some help from the Lake Street Council, a local nonprofit that has raised more than $6 million to help repair the area.
Dan Bryden, an audit director in the Commerce Department’s enforcement division, said the state has been surprised by how many damaged businesses are uninsured and underinsured. That fact supports a claim for larger, broad relief for impacted businesses, he said.
“A lot of people either don’t have insurance or are underinsured and will need to go to grants,” he said.
The Lake Street Council has begun accepting applications for an initial round of $3 million in grants to impacted businesses and nonprofits. Applicants must have experienced damage to their physical location along the Lake Street corridor from the St. Louis Park border to West River Parkway. They must be located south of 26th Street and north of 34th Street. Eligible firms can apply for up to $25,000, though the council says it expects the average award to be about $10,000. About 250 businesses were damaged in the area, and 33 were destroyed, the council said in a press release.
“We have a resilient community, but funds like these are essential to rebuild our businesses and our culture,” Henry Jimenez, executive director of the Latino Economic Development Center, said in a release. “Many started their lives and their businesses with little in their pockets except a strong work ethic and entrepreneurial spirit. That spirit might be hurt, but it’s not broken.”