St. Louis Mayor Cara Spencer signed an executive order to waive a 25% holdback of insurance payouts for property damage claims related to the May 16 tornado that damaged at least 10,000 properties in the city.
The order instructs the City of St. Louis city counselor and building commissioner to waive an ordinance enabling the city to hold back 25% of insurance payouts into an escrow. The order applies to structures that sustained 50% or more damage as a result of the May 16th EF3 tornado that tore through St. Louis.
All insurers operating in Missouri will be notified of the order by the Missouri Department of Commerce and Insurance and are instructed to make 100% of insurance payouts for claims related to the tornado, according to Spencer’s office.
“St. Louisans looking to rebuild after the May 16 tornado deserve every chance to do so, and to do so quickly,” said Spencer. “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 waiver is specific to properties located within the designated tornado impact area. The area includes neighborhoods in the following zip codes: 63105, 63112, 63108, 63113, 63115, 63107, and 63147.
In the weeks following the tornado, property owners who suffered damage were left in limbo whether they would immediately receive full insurance payouts. A state ordinance – Section 67.410, RSMo. – known as the “Holdback Law” allows townships, counties and political subdivisions to withhold 25% of payouts on insurance claims and place them into an escrow I intended to ensure that nuisance property owners make needed repairs to properties.
The City of St. Louis adopted the law as an ordinance in 1996. Spencer said that the ordinance has proven a powerful tool for the city to hold problem property owners accountable, but that “it has proven illogical for a situation” where thousands of insured residents have significant property damage and are competing with each other for contractors and supplies. Spencer said 88% of damaged properties are privately owned.
Photo: FILE – “My house is just gone and it was beautiful,” said Curtis McGrath, who retrieves some personal papers, photos and clothes from his home of 18 years in the Academy neighborhood of St. Louis, Mo., on Saturday, May 17, 2025, after the National Weather Service confirmed a tornado struck the city on Friday. (Laurie Skrivan/St. Louis Post-Dispatch via AP, File)
Topics
Catastrophe
Natural Disasters
Claims
Windstorm
Property
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