St. Louis Mayor Cara Spencer has made it easier for people whose property was damaged by the May 16 tornado to access their full insurance payouts.
In an executive order issued Thursday, Spencer asked the city’s building division and legal department to halt enforcement of a provision that allowed the city to keep 25% of an insurance payment in escrow until the owner had either restored or demolished the structure. The comptroller’s office is also being asked to pay back funds put into escrow before the change was announced.
It applies only to damage caused by the May 16 tornado and will remain in effect until December 2026.
“St. Louisans looking to rebuild after the May 16 tornado deserve every chance to do so, and to do so quickly,” Spencer said in a statement. “Waiving the 25% insurance payout holdback in this situation is the definition of a common-sense solution, and I am grateful to everyone involved in making this happen.”
The clawback adopted in 1996 was designed to give the city the resources necessary to tear down buildings that had been declared total losses by an insurance company and then abandoned by their owners.
Spencer said at a news briefing in May that the provision had been helpful when she was on the Board of Aldermen.
“What can be really, really damaging to a community is to have a property owner cash out on the insurance and then leave the community with the rubble and really no path to remedying it,” she said at the time.
But she acknowledged in Thursday’s executive order that it was “illogical” in the current situation.
