Backup Plan

According to the coalition, even if the direct target of a terrorist attack is a building, bridge, airport, or stadium, the real target is the United States government. And therefore, “it’s appropriate to have a governmental solution,” says Edwards, “at least until the insurance markets figure out how to insure against this type of thing. The event that’s being insured against is an attack on the political system, and we think that merits a political response.”

That response, according to the coalition, would take the form of a terrorism insurance bill that puts the government on the hook for damages above and beyond the amounts paid by policyholders (through their deductibles) and by insurance companies. One House bill would cap insurance companies’ risk at $10 billion, while a Senate bill would cap it at $20 billion; anything beyond that would come out of the government’s pocket. The Coalition is not so overly concerned with how the government comes up with the money. For example, one method advocates boosting premiums for all commercial property/casualty insurance policyholders to reimburse the government for funds paid out after terrorist attacks, while another doesn’t specify where the money will come from. The Coalition’s primary concern, according to Edwards, is finding a way to make terrorism insurance affordable and available for its members and commercial businesses nationwide. Many businesses are still insured because they purchased terrorism insurance before September 11, says Edwards, but it’s kind of like watching a train wreck in slow motion: “As each month comes by and their old policies expire, they have to make this impossible choice … and often the outrageous prices [of coverage] make the decision for them.”