When the major U.S. airlines secured financial aid from Congress following the Sept. 11 attacks, it seemed like a lock that the insurance industry would also receive some sort of government help. The expectation: Congress would guarantee all 9/11-related claims above a specific dollar amount.
Apparently not. As legislators go home for the holiday break, the insurance industry is still seeking relief. This lack of government intervention could mean hefty insurance premiums for companies…if they can get insurance at all.
With about 70 percent of commercial insurance policies expiring on Dec. 31, it’s not at all certain that insurers will be willing to renew all those policies–particularly policies that cover disasters and acts of terror. Indeed, a number of real estate officials are concerned property companies could have trouble securing coverage, especially owners of large, high-profile buildings.
Not everyone sees it that way, however. “I’m not persuaded the sky will fall,” Larry Mirel, insurance commissioner for Washington, D.C., told the Wall Street Journal. “Someone may step in the breach and offer terrorism insurance. But (availability of terrorism coverage) will fall unevenly around the country.”
What’s more, small and midsize companies have had an easier time in obtaining terrorism coverage. The reason: Most state regulations require that terrorism claims be covered in many policies.
