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How Low Will Premiums Go?

Pricing on the federally mandated terror insurance is trickling in

By Staff Writer | Updated on January 01, 2003

The first smattering of prices on the Congressionally mandated terrorism coverage is trickling out of the insurance industry, and they are–as supporters of the bill predicted–lower than standalone terrorism coverage, to the extent that such coverage was available before the legislation passed. But are the new prices low enough?

Before Congress and the White House decided to fix the problem, the insurance being offered to companies covered all kinds of terrorist acts–those committed in the U.S. or abroad or by foreign or domestic terrorists. Under the new law, insurers are only required to offer coverage on what is deemed “certified terrorism,” which is defined as attacks within the U.S. by individuals acting on behalf of foreign interests. Of the losses generated by this very specific brand of terror, the government has agreed to pick up 90%.

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