Terrorism insurance backup plan adopted
Construction and development interests are applauding the passage by Congress last month of a law that commits the federal government to underwrite a major share of insurance coverage against losses from terrorist attacks.It makes federal funds of up to $100 billion available for this purpose.
The federal government’s share would be 90% of losses above the deductible amount.
Insurance company deductibles are set at 7% of premiums the first year, 10% the second year, and 15% the third year of the three-year program.
“Terrorism insurance has become prohibitively expensive and increasingly difficult to obtain over the last 12 months,” says Real Estate Roundtable chairman Nelson Rising. “This has caused a severe drag on real estate market activity, putting at risk equity and debt investments held by millions of individual investors and retirees, threatening thousands of construction and related jobs, and impeding the nation’s economic growth.”