As Terrorism Increases, Insurance Coverage for Damage Decreases

UK (SANEPR.com) March 31, 2009 -- Insurance news site NoClaimsDiscount.co.uk recently looked into this issue and found that the ability for people, specifically those in the UK, to be covered is very rare. After checking the terms and conditions of home insurance policies offered by 16 leading companies, NoClaimsDiscount.co.uk did not find even one company that offered Terrorism coverage. Many insurance companies directly point out in their literature that they will not pay out for any terrorist related claims.

NoClaimsDiscount.co.uk notes that part of the reason that insurance companies are reluctant to offer Terrorism coverage is that they base their policies on risk and financial models. Although the amount of people in the UK who will claim due to terrorist attacks is small, insurance is not mathematically capable of estimating total terrorist costs for any given year, or even decade.

For example, the Canary Warf bombing by the IRA in 1996 incurred an estimated £108 million loss whilst the bomb which destroyed the Manchester Arndale Centre in July of the same year cost an additional £234 million. Predicting such a cost for the year is currently out-with insurer’s grasps and therefore it is simpler not to cover such claims.

Travel insurance that covers terrorism is possible to find, but extremely rare. Medibroker's International Private Medical Insurance (IPMI) covers terrorist strikes; however, it is a specialist insurance company.


Although, the government appears to be forming market structures that will provide more incentives to insurers to provide at least some degree of terrorism insurance, NoClaimsDiscount.co.uk notes that this rollout will likely be a slow process.


ABOUT NoClaimsDiscount.co.uk- NCD News covers insurance related news aimed at both the industry and consumers, providing a balanced look at developments that could affect its readership. You can find more information on the insurers covered in this article at http://www.noclaimsdiscount.co.uk/insurance