The city has suspended enforcement of the rule requiring 25% of tornado insurance payouts to be held in escrow.
ST. LOUIS — St. Louis Mayor Cara Spencer said Thursday that the city would not enforce an ordinance for May 16 tornado victims that allowed the government to hold a quarter of insurance payments for property owners in escrow.
The rule was intended as a tool at the city’s disposal to “keep property owners from taking insurance payouts and leaving empty shells to drag down city neighborhoods,” a Thursday statement from Spencer’s office read. Insurers operating in the state have been notified of the matter, the release said, and have been asked to pay the entirety of tornado-related insurance claims.
Spencer addressed the matter at a news conference in late May, describing the rule as effective for holding building owners with derelict properties accountable, but said it could “further victimize” those looking to repair structures damaged by the tornado.
Spencer described the executive order halting the 25% hold on insurance payouts as a “common-sense solution” in her Thursday statement.
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