New GAO Study: U.S. Needs Government Help to Insure for Catastrophes and Terrorism
National News • March 31, 2005
A new U.S. government report indicates that the private U.S. insurance industry would be placed under enormous strain without government intervention if there were a major terrorist or ...
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Subject: Australian Coverage
Posted On: March 31, 2005, 5:07 pm CST
Posted By: Lachlan
Comment:
Here in Australia we have a compulsory system of terrorism cover under our Terrorism Act. Basically insurers are required to collect premium and contribute this to a pool. Premiums are based on where people live, and it applies only to commercial property. 12% in cities, 4% in suburbs and 2% in rural, to reflect the risk for each area. The funds are only paid if the Federal Treasurer makes a statement that there was a declared terrorist incident, and if the funds are exhausted there are government assurances up to another $10billion or so AUD. Insurers still apply their terrorism exclusions, so only a true incident would be paid. This doesn't apply to domestic/private policies, only to business interruption, commercial property etc etc. Seems to keep everyone happy here. Reinsurance pools that are compulsory, backed by private bank bondss and those from the government, ensure that there will be funds available in what would be a truly messed up affair, to keep the economy from stagnating.
Subject: Australian Coverage