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How The Insurance Industry Helps Police Departments Tackle Bad Behavior


As conversations continue around the country about how police engage with the communities they serve, we've got a story this morning about an often-overlooked industry helping some police departments tackle bad behavior. Karen Duffin from our Planet Money podcast has the story.

KAREN DUFFIN, BYLINE: It was about five years ago. Tony Miranda was brought in as the new police chief in Irwindale, Calif. Fourteen hundred residents, it's a really nice little town - with one caveat.

TONY MIRANDA: The city was known for the police department because it garnered the most news. News at 6, news at 5, news at 11 - all negative.

DUFFIN: Police officers there had been accused of, or removed for, sexual assault, embezzlement and sex with a minor. So Miranda needs to make a lot of changes. He sees that there's tons of infighting. Lots of things have been neglected - training, basic technology. Like the program they use to send cops on 911 calls - theirs is broken. And when Miranda asks them, like, how do you guys even figure out where to go then?

MIRANDA: And one of the patrolmen holds up his palm and he says - like this, Chief. He's writing the calls on his palm of his hand with his ink pen.

DUFFIN: So Miranda tells his officers, I'm bringing in new blood. I'm going to hire a new No. 2.

MIRANDA: And one sergeant stands up and says, you know what, Chief? They're going to call for a vote of no confidence.

DUFFIN: Right off the bat, they tried to get him fired. And this may have been where the story ended, but Miranda had a powerful ally on his side - insurance. All those scandals had cost millions of dollars in legal fees, and insurance had been picking up most of the bill. But then their insurer told them - if you don't shape up, we're going to cancel your policy.

MIRANDA: An exterior threat that could close the Irwindale Police Department down.

DUFFIN: Without insurance, one big lawsuit could be enough to bankrupt a small town. So some towns have even shut down their police departments after they lost their insurance. John Rappaport at the University of Chicago studies police reform.

JOHN RAPPAPORT: There's a whole big, powerful, well-financed industry that is trying to influence police behavior.

DUFFIN: Big cities tend to self-insure, but smaller cities, like Irwindale, they buy either private insurance or join what's called a municipal risk pool - a sort of government insurance. In the mix of what can be a heated debate over police reform, insurers approach it as a business decision. Does this police behavior create risk? If yes, let's reduce it.

RAPPAPORT: We're not telling you you're bad. We're just telling you that your numbers are worse than they were last year, and we want to bring them back down to where they were.

DUFFIN: In Irwindale, their insurance authority gave them eight things to fix and 18 months to fix them. Miranda again.

MIRANDA: So they needed to either get a handle on things or cancel their policy. That was it.

DUFFIN: Which was motivating. There were trainings, new policies. They fixed their broken equipment. Tony Miranda got to hire that No. 2. And insurance isn't a cure-all for all bad police behavior. Insurers care mostly about expensive problems that might generate large payouts like excessive force. But pressure from the insurance authority worked for Irwindale. Eighteen months later, their insurance declared them new and improved - let them keep their insurance.

MIRANDA: I have to say, without that, I'm not sure if Irwindale would be here today. I'm really not sure.

DUFFIN: Karen Duffin for NPR News.

(SOUNDBITE OF FLUGHAND'S "DWARF") Transcript provided by NPR, Copyright NPR.

Karen Duffin
Karen Duffin (she/her) is a co-host and reporter for Planet Money, NPR's award-winning podcast that finds creative, entertaining ways to make sense of the big, complicated forces that move our economy. She joined the team in March 2018.