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  • How does terrorism affect my insurance?
  • June 29, 2015
  • terrorism insuranceBy

    There was a time when most of the potential hazards we all faced were considered routine and covered by a standard
    life insurance policy. All that changed on September 11, 2001.

    Losses that resulted from the destruction of the World Trade Center in New York City and other surrounding buildings reached nearly $31.6 billion in commercial liability and group life insurance claims, according to the Insurance Information Institute.

    Would your insurance policy cover an unusual risk such as terrorism? It depends on a number of factors, insurance experts say.

    Looking ahead, experts agree that the threat of biological or nuclear attacks somewhere in the world is not going to diminish. How then can homeowners best protect their property in the event of a terrorist attack?

    Although terrorism is not specifically referenced in homeowners’ policies, a typical policy does cover the owner for damage due to explosion, fire or smoke which could be the result of a terrorist attack.

    “Acts of war and nuclear, biological, chemical and radiological attacks are typically excluded because these events are fundamentally uninsurable due to the nature of the risk,” said Claire Wilkinson, Vice-President Global Issues, Insurance Information Institute in New York, NY.

    Condominium or co-op owner policies also provide coverage for damage to personal possessions resulting from acts of terrorism. However, damage to common areas like the roof, basement, elevator and boiler would only be covered if the property management company or association purchased terrorism coverage.

    Auto insurance policies will cover a car that is damaged or destroyed in a terrorist attack provided the policyholder has purchased “comprehensive” coverage. A person who has liability coverage only is not covered in the event his or her car is damaged or destroyed as a result of a terrorist attack.

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