Palm Springs Hotel Owner Speaks Out After Catastrophic Loss and Insurance Refusal

What began as a normal day turned into a nightmare for David Rios, owner of The Velvet Rope, a boutique hotel in Palm Springs. The catastrophic car bombing left his business in ruins when parts of the vehicle landed on his property, as a result of the explosion, destroying every door, window, and fixture — even landing in the pool. But what followed may be even harder to comprehend: Rios’s insurance company refused to cover a single cent of the damage.

“We pay thousands of dollars every month for insurance,” Rios said, still visibly shaken. “They won’t even cover a door lock, a piece of hardware, a window, a chandelier — nothing.”

According to Rios, the insurance company cited a clause that categorized the crash under an act of “terrorism” or extreme-scale incident — a classification requiring separate, additional coverage that he says was never properly explained during the policy process.

“They don’t tell you this,” he said. “They walk you through earthquake, flood… but something like this? It’s unimaginable. It was inches from people walking by.”

The emotional toll is as devastating as the physical damage. Rios recalled driving past the property moments after the crash, thinking it was an earthquake. “I saw the body. I saw the staff crying and screaming. I thought it was maybe a plane crash. It didn’t feel real.”

Rios and his team spent two and a half years building The Velvet Rope from the ground up, opening just a year ago. Now, much of what they worked for is gone — in an instant. “It’s just devastating. I’m still frozen. Every time I walk through, I find new damage. Something else to fix. And I keep asking, where is the money supposed to come from?”

Despite the financial and emotional hardship, Rios says there is one silver lining: the Palm Springs community.

“This city is like no other. The City Council, the people — they show up, they care. We feel safe here because of them. That’s what keeps us going.”

As Rios and his staff face an uncertain future, his story serves as a stark reminder of the gaps in insurance policies and the strength found in community.