Baseless claim developer got $1 trillion payday after Baltimore bridge collapse | Fact check

Joedy McCreary, USA TODAY
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The claim: World Trade Center leaseholder collected $1 trillion from insurance policy on collapsed Baltimore bridge

An April 6 Instagram post (direct link, archive link) shows a photo of Larry Silverstein, the New York developer and World Trade Center leaseholder.

“Larry Silverstein cashes in on $1 trillion insurance policy on Baltimore Bridge,” reads text in the image, which is a screenshot of a post on X, formerly Twitter.

It was liked more than 400 times in four days.

Fact check roundup: Baltimore bridge collapse sparks many misleading claims online. Here's what's true and false.

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Our rating: False

Silverstein has "nothing whatsoever to do with" the Francis Scott Key Bridge, his spokesperson said. Insurance companies do not insure items at values higher than the costs of replacing them, an industry expert said, and a replacement for the bridge is estimated to cost millions of dollars, not $1 trillion. A claim filed by the Maryland agency that operates the bridge was capped at $350 million.

Silverstein had ‘nothing whatsoever to do’ with Key Bridge

The Francis Scott Key Bridge collapsed into the Patapsco River around 1:30 a.m. ET March 26. A cargo vessel leaving the Port of Baltimore struck one of the bridge's columns, killing six workers and sending sections of the massive structure plunging into the water.

But the claim in the Instagram post is false. Silverstein did not hold an insurance policy on the bridge and is not collecting a massive payout from its collapse.

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“Mr. Silverstein had nothing whatsoever to do with the Baltimore bridge,” Dara McQuillan, a spokesperson for Silverstein’s company, said in an email to USA TODAY. “And insurance companies don’t pay out ‘$1 trillion’ to anyone. For anything. Ever.”

That outlandish dollar figure – which represents roughly one-seventh of the insurance industry's global market value in 2022, according to Statista – is an important clue that the claim is a fabrication.

Insurance companies will not insure an item or property at a value greater than its replacement cost, said Chuck Nyce, a department head and associate professor of risk management and insurance at Florida State University. While the cost of replacing the Key Bridge could surpass $350 million, USA TODAY reported, no credible estimates project it will be anywhere close to the amount in the post.

“It’s not a trillion-dollar bridge,” Nyce said.

That number is 250 times larger than the estimated total value of all insurance claims related to the collapse, which go beyond the structural damage to the bridge and include claims related to the deaths of the six workers and the damage to the ship and its cargo, Reuters reported, citing estimates from analysts of up to $4 billion in losses for insurers, a record for a shipping disaster.

The Key Bridge was built in the 1970s for $60.3 million ($316 million today) funded through Maryland Transportation Authority toll bonds. The insurance claim filed by that agency March 26 is capped at $350 million, The Baltimore Sun reported. USA TODAY reached out to the MDTA but did not immediately receive a response.

Anyone wishing to insure a property must have a demonstrated insurable interest in it, Nyce said. In other words, before a policy can be approved, a person must prove he would suffer a loss if that property is harmed, and there is no credible evidence Silverstein, a New York real estate developer, had such an interest in the Key Bridge.

“I have an insurable interest in my house,” Nyce said, by way of example. “I do not have an insurable interest in your house.”

Silverstein, who signed a lease for the World Trade Center six weeks before the Sept. 11, 2001, attacks, has been the subject of conspiracy theories previously debunked by USA TODAY.

The Instagram user who shared the post could not be reached.

Lead Stories also debunked the claim.

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This article originally appeared on USA TODAY: No $1 trillion insurance payday after Key Bridge collapse | Fact check