September 11th, 2001 changed the world in so many ways. It was the first major attack on the US since Pearl Harbor and it had an immediate and major impact on all of our day to day lives. The part that we are looking at today is how it changed the insurance landscape and talk alittle about terrorism insurance. 

Nearly 3,000 souls perished as a direct result of the 9/11 attacks. Many more have become ill from exposure to the toxic dust from the collapse of the Twin Towers. Many families have lost partners, spouses, parents or children in the attacks or from medical conditions related to dust exposure. The Sept 11th Victim Compensation fund was created to help people get back on their feet and to alleviate the financial burden caused by the medical treatments they needed. However, the original pay out of $7.049  billion was running out of money by 2010. A new Never Forget the Hero’s act was done in 2019 to fully fund anything those victims need through 2090. 

You want read more about how these payouts were calculated and how much victims actually received you can see for yourself at: https://911victimattorney.com/average-compensation-amounts-for-9-11-victims/

As for its effect on the insurance landscape we had to come to terms with it being a sad truth of our world that some use violence as means to their political ends. With the possibility of terrorist acts close to home, it makes sense to understand whether your home, family and business are insured in the event of such an incident.

Prior to 9/11, standard commercial insurance policies included terrorism coverage as part of the package, effectively free of charge. Today, terrorism coverage is generally offered separately at a price that more adequately reflects the current risk.

Insurance losses attributable to terrorist acts under these commercial policies are insured by private insurers and reinsured or “backstopped” by the federal government via  the Terrorism Risk and Insurance Act (TRIA).

Under TRIA, owners of commercial property, such as office buildings, factories, shopping malls and apartment buildings, must be offered the opportunity to purchase terrorism coverage.  For the terrorism coverage to be triggered under TRIA for commercial policies, a terrorist attack has to be declared a “certified act” by the Secretary of the Treasury.

Hopefully something like 9/11 never happens again but the odds of it NEVER happening again aren’t great. If you feel like adding  terrorism coverage to your current policy is something you need to do it’s pretty simple.