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INSURANCE INFORMATION INSTITUTE
New York Press Office: (212) 346-5500; media@iii.org

NEW YORK, September 9, 2011

— Individuals have protection from losses due to acts of terrorism written into many of the policies they have already purchased, according to the ���ϲ����� Information Institute (I.I.I.).

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“Standard homeowners insurance policies include coverage for damage to property and personal possessions resulting from acts of terrorism, even though the word ‘terrorism’ is not usually referenced specifically in the policies themselves,” said Michael Barry, vice president, Media Relations at the I.I.I. “Homeowners policies also cover the policyholder for damage due to explosion, fire and smoke—the likely causes of damage in a terrorist attack.”

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Standard renters policies include coverage for damage to personal possessions due to a terrorist attack, Barry added. Moreover, condominium or co-op owner policies cover damage to personal possessions resulting from acts of terrorism. Damage to the common areas of a condo/co-op building like the roof, basement, elevator, boiler and walkways is covered only if the condo/co-op board has purchased terrorism insurance coverage.��Coverage for the apartment complex itself must be purchased by the property owner or landlord.��

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There are, however, exclusions in many of these same policies for losses incurred during a war or because of a nuclear, biological, chemical or radiological (NBCR) event. War-risk exclusions reflect the realization that damage from acts of war is fundamentally uninsurable. No formal declaration of war by Congress is required for the war risk exclusion to apply. NBCR attacks are another example of catastrophic events that are fundamentally uninsurable due to the nature of the risk.

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In addition, auto and life insurance policies provide coverage in the event of terrorism-related losses, as follows:

Auto insurance policies will cover a car that is damaged or destroyed in a terrorist attack if the policyholder has purchased comprehensive coverage, and nearly 80 percent of all American drivers have it, according to the National Association of ���ϲ����� Commissioners (NAIC). Moreover, most people who have loans on their cars, or lease a vehicle, are required by their lenders and leasing companies to carry this optional form of coverage. Car owners who buy only liability coverage are not covered in the event their vehicle is damaged or destroyed as the result of a terrorist attack. One recent example of an attack meeting this criterion: the unsuccessful attempt to detonate a car bomb in New York City’s Times Square in May 2010.

Life insurance policies do not contain terrorism exclusions; proceeds are paid to the beneficiary as designated on the policy. Health and disability insurance policies may provide coverage for loss of life, injury or sickness to individuals in the event of a terrorist attack.

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For more information, see the I.I.I.’s resource page, 9/11: The Tenth Anniversary.

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