The city of Niota, Tennessee, population 700, has a police department with just three officers. So when two of them wound up in court in 2011 accused of beating up a local motorist, Niota had a huge problem. The motorist sued for $35 million, more than 75 times the city budget.
Civil courts are a common path for police misconduct victims, costing major cities hundreds of millions of dollars over the past decade. Many early Black Lives Matter headlines are linked to monetary settlements: Michael Brown, $1.5 million; Freddie Gray, $6.4 million; Eric Garner, $5.9 million; Tamir Rice, $6 million.
But a town the size of Niota can't raise that kind of money. Like most smaller cities, it purchases liability insurance, via either a commercial insurer or a nonprofit "risk pool" with other nearby governments. The insurers help cities weather the cost of legal claims from playground injuries to wrongful convictions to police abuse.
"We could not have a city without insurance," said Lois Preece, then and now Niota's mayor. "Anyone slipping on the street could wipe our budget out."
By the summer of 2013, Niota's insurer, a Tennessee risk pool, was fed up. Preece said the insurer gave her a choice: remove the officers or lose coverage. And just like that, although criminal and civil cases against them were dismissed, two-thirds of Niota's police force had to be replaced.
About 85 percent of police departments serve municipalities of under 25,000 people, and they are likely to be covered by liability insurers. These smaller departments rarely make national news, but they are more likely than big-city departments to be troubled, experts said. While police killings have fallen in big cities over the past six years, a FiveThirtyEight data analysis shows that they have increased in suburban and rural areas.
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In recent years, a little-known player has been quietly reshaping America's smaller police departments: the insurance industry. Across the nation, city insurers have demonstrated surprising success in "policing the police," eliminating risky protocols, ousting police chiefs and even closing problematic departments altogether.
Yet insurance is no white horse, experts caution. Some experts worry that many insurers do little more than shield cities from the consequences of police misconduct.
"As an aggregate, insurers need to wake up," said John Rappaport, a University of Chicago law professor who specializes in criminal justice. "There are high levels of fatal police violence. You may think you're an insurance company, but you're actually a police regulator."
Hanging out at police bars
For insurers, police reform is about money, not morality. Just as State Farm wants to prevent car crashes, a liability insurer wants to prevent lawsuits.
When the customers are police departments, "loss prevention" means teaching police departments how to reduce risk. In the first in-depth study of how insurers affect police, Rappaport surveyed the industry's carrots and sticks, from policy audits to virtual reality use-of-force simulators. Often, insurers educate departments about risky topics like vehicle pursuits and strip searches. Many do site visits and go on ride-alongs, keeping "watch lists" for departments with histories of costly lawsuits, according to the study. Rappaport's favorite example is the insurer that sends representatives incognito to hang out at "cop bars" to observe the police culture.
"Insurers are clearly affecting the behavior of police departments they insure, for better or for worse," Rappaport said. "They are capable of doing it for the better and sometimes more efficiently than governmental agencies and prosecutors."
The police department in the small California city of Maywood, for example, had faced pressure to change from its City Council, the state attorney general and the Los Angeles Times, but its insurer ultimately had the last word.
By 2010, the 1-square-mile town just south of downtown Los Angeles had racked up $17.3 million in five years of claims against the police, according to court documents. The Los Angeles Times said the Maywood department was "a haven for misfit cops who had been pushed out of other law enforcement agencies for crimes or serious misconduct," while the attorney general said it was responsible for "gross misconduct and widespread abuse including unlawful use of force against civilians."
In response to Maywood's climbing liability costs, the city's insurer gave the department a 20-step "Performance Improvement Plan." Maywood didn't meet the insurer's requirements to improve officer training and incident reporting, according to court documents. The city lost coverage and disbanded its police department. The Los Angeles County Sheriff's Department is now responsible for patrolling Maywood's streets.
"It is very difficult on a city to maintain insurance in general in today's climate," the city said in a statement. "During the time that the city reorganized and disbanded its police department it was facing a fiscal crisis. The PD was plagued with many issues. ... This is no longer the case for the city and we have found that it was [a] good fiscal and policy decision for the city."
Insurers can also push operational and personnel changes. In the Tennessee city of Rutledge, near Knoxville, pressure from an insurer led the mayor to fire a police chief facing assault charges. "I hate it for him, but my hands were tied," the mayor said.
But not all insurers take such a hands-on approach to police risk. Some don't see personnel changes as part of their philosophy. While Rappaport calls insurers "private regulators," some shied away from that characterization in interviews, preferring to be called "partners," "consultants" and "extensions" of the cities they serve.
The downsides: 'Insurers are not the panacea'
Amid nationwide calls for police reform, some experts wonder why there aren't many more cases in which insurers prompt reform.
"It's hard to believe police brutality payouts would not motivate a city struggling with their insurance," said Lisa Soronen, executive director of the State and Local Legal Center, which assists state and local governments with cases before the Supreme Court. "How would that not make a difference?"
But Soronen said it's more complicated than that, because lawsuits are an imperfect proxy for police misconduct. It isn't easy to sue the police. Barriers range from attorneys' fees to legal doctrines like qualified immunity that protect government entities. Suits can drag on for years, which means consequences are delayed.
The Association of Governmental Risk Pools, which has 215 risk pool members, said it couldn't comment specifically on police-insurer relationships. It's a difficult ask, Executive Director Ann Gergen said, because widespread variation across cities complicates trends even for general liability in anything from sidewalk maintenance to fire departments.
"There are no norms, there are no trends, and there are no single directional pointers," Gergen said. "Every single jurisdiction is different, and many of the commonly cited cases are exceptions."
That's one of the drawbacks to relying on informal regulation by insurers rather than officials who are answerable to the public, some experts said. Nobody notices when a risk pool drags its feet.
"There's a high road and a low road to reducing liability costs, especially when there is no real standard," said Joanna Schwartz, a law professor at UCLA who specializes in police liability. "The low road is reducing payouts as opposed to reducing harm."
For each case like Niota and Maywood, experts said, there are likely to be dozens more in which insurers opted not to demand changes. That's what happened in one of Washington state's largest police payouts, a $13 million settlement in the 2013 shooting of Leonard Thomas.
Court documents say Thomas, 30, a Black man, was killed by a Lakewood police sniper while unarmed and clutching his 4-year-old son on his porch. When Thomas' mother reported a domestic dispute, a Pierce County SWAT team that included Lakewood officers responded with military-style vehicles, explosives and snipers.
The city of Lakewood and four of its officers were found liable in a lawsuit for civil rights violations. Insurance paid $11.5 million of the $13 million settlement. The risk pool didn't drop Lakewood, nor did it pressure Lakewood to make internal personnel changes. After Thomas' death, the Lakewood department looked quite similar. Lakewood left the county SWAT team, but all four officers remained on the Lakewood force. One was promoted to chief.
Now the city faces another wrongful death claim involving one of the same officers. In May, Lakewood Officer Michael Wiley shot and killed Said Joquin, 26, during a routine traffic stop. The $28 million claim alleges that Joquin had his hands up. In 2013, Wiley led the SWAT team that breached Thomas' door with explosives. He also repeatedly shot Thomas' dog, which the court found unreasonable because the dog had already been shot by a different officer.
It's a tough pill to swallow for Jack Connelly, a civil rights lawyer who represents Joquin's family and previously worked on Thomas' case.
"When you're bringing these cases, you hope they're going to cause some change and prevent something similar from happening in the future," Connelly said. "It's very disconcerting that nothing was done to prevent this from happening again."
The Joquin claim alleges that Lakewood was negligent and reckless, because it "did nothing" to improve training or rein in officers after Thomas' death. Wiley isn't Lakewood's only repeat liability risk. Jason Cannon, another Lakewood officer named in the Thomas suit, has been involved in two other fatal police shootings, one in 2011 and one in 2015. Joquin's claim is the third Lakewood police killing case that names Michael Zaro, the current police chief, who commanded the SWAT team that killed Thomas.
No criminal charges were filed against officers in any of the cases. The 2015 officer-involved shooting was settled in civil court for $500,000.
The city of Lakewood, its police department, Wiley, Zaro and Cannon all declined to comment or didn't respond to requests for comment. A review of annual police department reports from Lakewood said Lakewood has expanded a program in which officers partner with mental health professionals. The reports said use-of-force reports dropped nearly 20 percent from 2014 to 2018.
The situation in Lakewood is an illustration of the role economics can play in police accountability failures, the American Civil Liberties Union of Washington said.
"Insurance is not the only problem with police accountability, but it is an important factor," said Nancy Talner, a senior staff attorney with the ACLU of Washington. "Economics are supposed to be about incentives and deterrents affecting people's behavior. That failed here."
Insurers have no mandate for police reform, and many wouldn't want one. However, Connelly said, insurance provided a "cushion" for Lakewood, insulating politicians and taxpayers from financial consequences.
"When the Thomas verdict was read, you could really feel justice in the courtroom," Connelly said. "And that's what's so sad about the city of Lakewood. They just did not pay attention."
To insure or not to insure?
Some wonder whether cities would tolerate less police risk if they had no insurance at all.
The Detroit suburb of Inkster had to fix its problems without the help of an insurer. When it was hit by a police claim in 2015, it was in financial no man's land, too financially distressed to pay any claims out of its budget or to obtain sufficient insurance.
The city was sued in the beating of Floyd Dent, 57, a Black man who wasn't armed, who rolled through a stop sign. Inkster police officers pulled him from the car, put him in a chokehold, punched him 16 times, kicked him and Tasered him, all recorded on dashboard video.
Dent's settlement was $1.4 million, but Inkster's insurance covered only payouts above $2 million. Budget strains had already forced the city to dissolve its school district and lay off employees. So Inkster, where 1 in 3 people live in poverty, had to raise property taxes.
"The costs of insurance for communities that look like Inkster seem to be higher across the nation," Mayor Patrick Wimberley said via email. "Unfortunately the residents of the city took the hit in this instance as there was a tax levy added to every residence to cover the cost of the judgment."
It was a breaking point for the city — which is among the most dangerous in Michigan, with a history of police trouble, perceived as a "slum lord heaven," with "no police, no rules," according to residents. Soon thereafter, the chief of Selma, Alabama's police department, William Riley, got an unexpected phone call from Michigan, asking whether he would help reform the Inkster department.
"The lawsuit was the wake-up-call," said Riley, who took the job. "They sort of had no choice but to change."
Riley inherited a department that was more than three-quarters white policing a population that is nearly three-quarters Black. With local businesses and faith leaders, he started a police academy scholarship that has brought five Black officers onto the 23-person force. He emphasizes "community policing" — initiatives like movie nights and a police athletic league. His other investments have included body cameras, engagement with incarcerated people and training in areas like cultural awareness and mental health. Crime has dropped by nearly 25 percent since 2016.
"The word 'reform' doesn't say much," Riley said. " We've been 'reforming' for decades now. We had to transform."
But growing pains linger. Inkster cut nearly two-thirds of its officers and now partners with the Michigan State Police.
"You changed the local department, but you've now got a city full of state police who don't know me and don't know Inkster," said James Gibson, a formerly incarcerated resident of Inkster. "So now there's no schools, but more cops. It's the opposite of what you do when you want to improve the community."
In the question of who pays for police misconduct, there are no perfect answers. Relying on an insurer to fix a flawed department may seem to some like a poor proxy for a courtroom reckoning, but at least insurers can make multimillion-dollar settlements possible.
"This is a story about potential, about promise," said Rappaport, of the University of Chicago. "This is a story about getting insurers to wake up and embrace the role they're playing.
"If you're not doing good, you're doing harm," he added.