Terrorism insurance will likely be unavailable in the new year and the few plans for such coverage that do remain will become increasingly costly, The New York Times reported
A bill that would have protected such coverage died as a result of a single senator's objections — even as both the Senate and House overwhelmingly passed their own versions of renewals of the Terrorism Risk Insurance Act (TRIA), the Times said.
That senator is Oklahoma Republican Tom Coburn, who is retiring at the end of the year but who said he wasn't buying the fears of an industry placed against the costs to the country.
“While many members of the industry will tout Chicken Little scenarios related to the temporary lapse of TRIA, it’s important to temper these dire predictions with the fact that property/casualty has $600 billion in reserves — 15 times the insurance losses related to 9/11,” he said in a statement, according to the Times.
The hold-up on renewal has shocked those in the insurance industry who expected an easier ride. It also is expected to have wide impact on certain businesses and growth, PBS reported
“This is taking people by surprise, quite frankly,” Robert P. Hartwig, president of the Insurance Information Institute in New York, told the Times of the Congressional roadblock.
“It won’t have an instantaneous effect, the economy grinding to a halt, cancellation of the Super Bowl. The effects will be more gradual, but in many ways more insidious,” Hartwig said.
The act was written post-Sept. 11 and was designed to protect facilities like sports arenas and other large-scale development projects amid fears of another potential broad-scale terrorism attack and costs associated with such an event. Under the law, the federal government would cover losses in excess of $100 million.
Developers have noted that many rebuilding projects post-9/11 would not have happened without such coverage in place. Now, they are registering surprise that renewal of the act could be held up.
“Everybody expected this would get done,” noted an angry Manhattan developer Douglas Durst, to the Times. “These actions make it impossible to make investments in this country.”
While contrary to rumor, this year's Super Bowl will not be cancelled, but moving ahead, other events may be shuttered.
New York Sen. Chuck Schumer blasted the actions of a few to kill a badly needed program in a column posted Thursday by the New York Daily News
. He called their efforts petty politics.
"The expiration is a travesty because the program is so important to our country, and to New York especially," Schumer wrote.
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