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The Roles of Insurance and Funding in Police Reform

The following is part 1 of 2 in our IACP Leadership Series conversation between Benchmark CEO Ron Huberman and John Rappaport, Professor of Law, Ludwig and Hilde Wolf Research Scholar, University of Chicago. In this entry, Mr. Rappaport discusses the evolving role of insurance in police reform.

He also shares his thoughts on this important moment in time, which has created such an outcry for reform, as well as different perspectives on funding options proposed to help balance a variety of societal needs.

RH: We’re really excited to have John Rappaport take part in our leadership series. John comes to us as a professor from the University of Chicago Law School. And we’re pleased to report that he chairs a research consortium associated with Benchmark, known as the National Police Early Intervention and Outcome Research Consortium — a group focused on a variety of compelling, contemporary issues in the policing world.

John, you’ve written a ton of really interesting pieces on the role of insurance and police reform. When I first heard about that I was like that seems a little odd to me. It was insurance, right? Can you tell us a little bit about the insurance landscape — and why you see that, or what the research has shown that to be, in terms of a driver for police reform?

JR: Sure. I think it may be more appropriate to characterize it as a potential driver of police reform. It’s an important lever. I think the insurance companies are an important player in this arena, and they can play in one direction or they can play in another . . . or they can play very, very passively. Basically, I think a lot of people haven’t known about this for very long because we tend to focus on our conversations about policing on the same few cities over and over. We’re always talking about New York, Chicago, where we both live, or LA.

And these big cities – along with a handful of the biggest of cities in any given state – are usually self-insured, which is a fancy way of saying they’re mostly not insured. Or, they maybe have some kind of excess insurance that kicks in when there’s a really, really serious and costly incident. But for the most part, they’re paying the judgments and settlements for any police-related liability out of the city’s budget.

Most law enforcement agencies in this country – there are 18,000 of them – most of them are not in places like Chicago, New York or LA. They’re in much smaller places where they don’t have the tax base that big cities have . . . and if they get hit with a million-dollar or two- million-dollar settlement — that is an enormous deal for them. They don’t have that kind of excess money lying around, so they go out in the market and they buy insurance. And what happens then is that you’ve got an insurance company that is promising to pay out any money that this city might owe in the future in a judgement or settlement for some police liability-related issue.

And so, the insurance company doesn’t really want to pay out. It’s in the insurance company’s interest to reduce the amount of payouts. Just like your property insurer wants you to install sprinklers and have fire extinguishers because they don’t want to pay out. If there is a fire, they want to keep it small. It’s the same kind of relationship. So, insurance companies find themselves in a place where they have a financial incentive to try to reduce police misconduct. They do this through various kinds of loss prevention. Just as in the property context where they might recommend sprinklers and fire extinguishers, insurers in the policing context will recommend certain kinds of training, certain equipment, certain policies about use of force — and things like that.

RH: But today my understanding is that it’s not commonplace, but it’s a potential. What are your thoughts, John?

JR: Well, I think it’s actually fairly common. In some of my work I’ve written about some extreme examples where insurers have said, “We’ve really had it.” This may be a tiny department – let’s say four officers – and there’s one guy who gets sued 10 times a year, and at some point, the insurer says, “We’ve had it. You get rid of this guy or we’re not going to cover you anymore.” I have found some examples like that. Those I think are the exception.

But I think that some are more mundane, but still very important types of loss prevention that I mentioned — like weighing in on policies and education on legal developments. For a lot of small departments, they don’t have a legal staff, they don’t have a city attorney with a lot of extra bandwidth. So, staying abreast of the latest developments in Fourth Amendment law, let’s say, is really challenging. The insurers play a role in that and in doing online education or classroom education.

They play a role sometimes in subsidizing expensive kinds of training — like there are these prequel virtual reality simulators that you can use to train officers on how to resolve difficult situations without using force; but they’re really, really expensive. And so sometimes an insurer – basically using pooled money from lots of different departments – can buy one and make it available to all the departments.

So, I think things like that are happening right now, but there’s a lot of variation.

The reason I started by saying this is the story about the potential for reform is that there’s a lot of variation among insurers. And the insurers don’t necessarily feel completely comfortable thinking of themselves this way. They think of themselves as partners – here to support the agencies and help them
do their jobs better – but not here to tell them what to do.

That said, I think depending on who you ask – and what their motives are – they might characterize what’s going on a little bit differently.

RH: Understood. Super interesting and I think it’s going to change. You talked about police reform. And, and you know, we’ve had many chapters of police reform. There was the professional model. Then there was problem-oriented policing, followed by community policing. Compstat was in the middle of community policing as well, which had a big impact on crime. I’ll give you a minute warning here, before asking you about what the next chapter of police reform might look like?

Let’s back up, first. Because I think back in March, when the pandemic first hit, to say that we are going to have broad civil unrest associated primarily with police reform — I certainly wasn’t predicting it, and I’m not sure a lot of other people were. Can you give us a sense of what changed; what was it about the George Floyd event . . . or the pandemic . . . or this moment in American history that caused this outcry?

JR: It’s a good question. I have to say as a responsible academic that these things always have multiple causes. Just as crime rates have multiple causes. Things like social movements, and why this moment rather than that moment — there’s always a lot of different causes. And I can’t claim to know . . . but let me give you my take. I’ve done some research that suggests that things really changed in the public’s eyes in the summer of 2014, when Michael Brown and Eric Garner were killed. You can just look at objective data sources like Google Trends, and look at how often people search in Google for the words “police brutality” or “police misconduct”. Before the summer of 2014, it was basically flat and then it spikes up after these events.

Also, press coverage about police misconduct and police brutality also spikes up in the summer of 2014 if you just count the number of stories using these terms. In some of my research, I actually say – and this was written before George Floyd was killed – what’s going on in policing? It seems like everyone is so worked up about policing, everyone is talking about policing. Are the police sort of spiraling out of control, or is it actually reflective of a change in public attitudes?

My co-author and I, we looked at all the evidence we had – using insurance claims data, actually – and we found really no evidence that the police were getting any worse, or behaving any worse. You can also just see this in some sort of topline measures of number of people killed by the police per year. Not saying it’s low enough, but it hasn’t been getting higher. It’s basically been flat, yet it feels in the air like things are really changing, right? And I think that’s reflective of changing public attitudes. So, I think that the public is becoming increasingly sensitized to policing issues since 2014.

The movement has been growing, but clearly what happened with George Floyd was a tipping point. I think sometimes the simplest explanation is the best. That video is really, really harrowing to watch. Whatever happened with Michael Brown is not on video. And I think the video of Eric Garner being killed shook a lot of people, but there you can see some struggle — and different people can look at it in different ways. I have my view about it, but I understand that people watch the video and see different things. It was pretty hard in my opinion to watch the George Floyd video and not be disturbed by that.

And you put the COVID-related shutdown on top of that — when people are feeling on edge, they’re irritable. They’re also upset with the presidential administration. I think it just exploded. But I think that it’s really the culmination of years and years in the making. So, it’s just the right set of conditions . . . and the right match dropped into the fuel. From my perspective, that’s the explosion that we’ve seen.

RH: John, you said something that I really firmly believe in. It’s been a long time since I’ve been a police officer on the street. I was policing the streets of Chicago in the mid-’90s. And if I look at what I see as police conduct today versus then and early 2000’s, I think it’s actually much better. And it seems to me one of the big changes is video. It’s one thing to hear about an incident. It’s another to see that visceral humanity of when you actually see police conduct like in the George Floyd incident versus it being read in the paper . . . or it’s just reported as an allegation.

I think video in our society is consumed all the time, distributed in every way.

And it’s just been a big game-changer. So given that, I think everyone agrees that we are at a really important moment of police change. There are calls to re-imagine the police, there are calls to defund the police. There are tons of lessons learned through the last few cycles of police reform. What does this next chapter look like to you, John? What do you think needs to happen, and what do you think might happen? 

JR: From where I see it, and of course I’m informed not only by what we’re seeing in the news but what I’m also reading among policing academics, I actually see something of a split. I think a huge part of what I’ll call the movement – where I’m lumping in academics, people actually protesting out on the streets, and just concerned citizens – is the desire to push things in what you might call a democratizing direction where the idea is: we need to give more power to marginalized communities. We need to let people have more say in how they’re policed, and how much they’re policed.

We should have more civilian oversight. We should have community control. These are all terms that are a little bit vague. They’re old terms that have been given new meaning. They’re still a little bit vague, I think, but the general idea is to empower people; especially empower people in communities that feel over policed, that feel like they’ve been disproportionately and unfairly the victims of bad police behavior. Give the power to them, let them decide what kind of policing they want and need.

I think a different path, and not necessarily contradictory, is more technocratic.

It’s more about continuing with the trend of professionalizing the police. We’ve made some progress, but not far enough. We need better people, better-educated people. Police need to be trained better. We need better monitoring of them — body cams are part of this. And I don’t think these two things are in opposition, but I do think they represent two different mindsets.

I believe we’re seeing a little bit of a struggle here between them. Often the people in the first camp – the democratizing camp – they kind of look at the second camp and think you guys just want to make these incremental little changes . . . and it’s not really going to do any good. Then the people in the second camp look at the people in the first camp and think you basically want to overthrow the government — and even if I agreed with you, it’s never going to happen. So, let’s try to make things better and focus on harm reduction; you have these two opposing philosophies, even if the solutions don’t necessarily need to be in opposition.

RH: I hear you, John. What do you think of the defund the police part of this equation? There’s a recent Bloomberg story on it, which says it’s not really real. There are a few examples of it that appear very real, right? What do you think that looks like in this next chapter? 

JR: I think that it’s really important if you ever want to have a conversation about defunding the police to clarify your terms at the beginning, because you could be talking about two entirely different things. You can get in a fight with somebody because you have different definitions in your head. So, when some people hear defund, they think it literally means take all the money away from the police —

it’s basically the same as abolishing the police. And they think this is both a horrible idea and really unrealistic. To them, the people who are talking about defunding the police must be crazy.

I think there’s a much more modest way to think about defunding the police, but to me it feels a little bit like common sense. And that is to say, “Look, we tend to have ­– in many respects – a small government compared to some of our Western European counterparts. We don’t have the robust kinds of social services that we see in some other countries. Instead, we have this police department — and we ask them to do all kinds of different things.

RH: We ask them to do everything on some levels.

JR: Yeah, like people who are struggling with mental illness, people who

don’t have housing and have domestic disputes, All sorts of different things; noise complaints, parking violations, getting cats out of trees — all this stuff. And I think one way to look at the defund campaign is just to say that a lot of this stuff doesn’t need to be done by police officers. It doesn’t need to be done, frankly, by people wearing intimidating-looking uniforms and carrying firearms. If you’re carrying a firearm, there’s at least a chance you’re going to use it.

We’d feel better if some of these jobs were done by other people who could do them as well or – in some cases we think – better than police officers, because they have more training related to dealing with people who have mental health issues, right? So, let’s try to trim off some of the fat, they would say, and let’s redistribute those dollars to agencies like the Department of Mental Health Services and hire more social workers, more nurses. Let’s make those professionals the frontline people who go out when there’s somebody who’s having a psychotic break — or something of that nature.

I think that’s a very moderate way of looking at defunding. It’s one that I don’t find too hard to get behind, even if I’m skeptical about some of the more extreme approaches. But still, I think there’s a lot we don’t know.

RH: I think theoretically, it sounds great. If you have someone who’s a trained mental health professional . . . police are trained at de-escalation, but fundamentally they will never have the training that someone who’s made that their life work. If there are lessons that have come from prior police reform to me, it’s that when we dehumanize police they become warriors. And what would make them a warrior? I would say they become warriors if they’re only needed when their gun is needed.

It seems exactly opposite of what we were trying to accomplish with community policing — which is to become embedded in the community, to become trusted. And if we take police out of the day to day because there are other people who might do it better or differently, then the police are left to be the folks who deal with violent, hardened criminals. That, to me, is a scary place to be because I think ultimately there’s mission creep, right?

The idea that at 2:00 AM when someone calls 911 because they’re scared of another person – whether that person has a mental illness or has ill intent as a criminal – whatever that might be, it’s real-time. It doesn’t allow itself time to figure out who’s the best resource to show up — and it will always, I think, ultimately fall on the police.

So, it’s the right debate to have. That said, a caution I would bring up as we’re having a dialogue about this is the idea of ‘how do we keep the police as humanized as possible in a very hard job?’

JR: I agree with a lot of what you just said, and I think it’s a really good point that if you say police are reserved for combat situations, then in fact, that might actually reinforce the warrior mindset. But I think one response to that might be that if the police spend less time responding to some of the calls they respond to today – cats in trees, noise complaints, low-level traffic incidents, ticketing – that they might actually be freed up to spend more time getting to know people in the community. It’s not that they’ll necessarily be invisible the rest of the time — it could be more about interacting in different ways.

RH: For sure. I love the debate, John. And I think it will be interesting to see where cities land on this one.

Don’t miss Part 2 in our post, The Call for Research-Based, Data-Driven Police Support, where Mr. Rappaport shares his thoughts on where policing fits in dealing with today’s broad societal issues and needs. He also weighs in on the growing importance of data collection and in-depth research to drive and direct applied science for developing more effective reform and police support measures.

This interview from October 2020 has been edited for clarity.