Melvindale Faces Insurance Crisis Amid Lawsuits Against Police

City's liability coverage canceled due to growing legal issues, exposing taxpayers to risk

Published on Feb. 12, 2026

Got story updates? Submit your updates here. ›

The city of Melvindale, Michigan is facing a crisis after its liability insurance was canceled due to a rash of lawsuits against the police department. The cancellation could leave taxpayers vulnerable to judgments and settlements stemming from the legal issues, which have included allegations of excessive force, misconduct, and a towing scam. Experts say the rising cost of municipal insurance is a growing concern nationwide as cities face increasing liability from lawsuits, natural disasters, and cyberattacks.

Why it matters

Melvindale's insurance woes highlight the broader challenges cities face in obtaining affordable liability coverage as legal claims against police departments and other municipal agencies continue to mount. The loss of insurance could have serious financial consequences for the city and its residents if they are forced to pay out judgments or settlements from lawsuits.

The details

Melvindale, a suburb of Detroit with a population of around 12,500, has been facing a series of lawsuits against its police department for years. These include allegations of excessive force, misconduct, and a towing scam. The growing number of legal issues has led the city's insurance carrier to cancel its liability policy, which is set to expire this year. City officials have declined to discuss the cancellation in detail, but experts say the rising cost of municipal insurance is a nationwide problem driven by increased liability concerns.

  • In 2018, an ex-police chief filed a lawsuit accusing the city of wrongful termination and a police lieutenant of running a towing scam.
  • In May 2026, a Muslim police officer filed a lawsuit alleging he was targeted by supervisors and colleagues due to his religion and ethnicity.
  • In August 2026, the same police lieutenant was charged with new misconduct and assault and battery charges related to excessive force.

The players

Melvindale

A suburb of Detroit, Michigan with a population of around 12,500 people.

Chad Hayse

The former police chief of Melvindale who accused the city of wrongful termination and a police lieutenant of running a towing scam.

Matthew Furman

A Melvindale police lieutenant who was accused of running a towing scam and using excessive force on the job, leading to multiple lawsuits and criminal charges.

Hassan Hammoud

A Muslim police officer in Melvindale who filed a lawsuit alleging he was targeted by supervisors and colleagues due to his religion and ethnicity.

Robert Kennaley

The former police chief of Melvindale who denied the allegations made by Cpl. Hassan Hammoud.

Got photos? Submit your photos here. ›

What they’re saying

“We must not let individuals continue to damage private property in San Francisco.”

— Robert Jenkins, San Francisco resident (San Francisco Chronicle)

What’s next

The city of Melvindale is facing an uncertain future as it tries to find a new insurance provider before its current policy expires. If it is unable to secure coverage, taxpayers could be left on the hook for any judgments or settlements stemming from the ongoing legal issues with the police department.

The takeaway

Melvindale's insurance crisis highlights the growing challenges cities across the country are facing in obtaining affordable liability coverage as legal claims against municipal agencies continue to rise. This issue could have serious financial implications for cities and their residents if they are forced to pay out judgments or settlements from lawsuits.