The Property Casualty Insurers Association of American (PCI) on Tuesday commended Arizona Gov. Janet Napolitano for signing into law legislation that will allow business owners an opportunity to lower their insurance costs.
“This bill, HB 2192, will give businesses a cost-saving option in selecting their fire insurance coverage that does not now exist. Under current law, all commercial fire policies must include coverage for acts of terrorism,” said Sam Sorich, PCI regional vice president. The bill was sponsored by PCI.
Sorich explained that HB 2192, which becomes effective 90 days after the close of this year’s legislative session, will allow business owners to purchase fire policies without terrorism coverage and, thereby, lower their premiums.
Under the federal Terrorism Risk Insurance Act (TRIA), insurance coverage for acts of terrorism must be offered to policyholders. However, the premium for the coverage can be expensive. As a result a number of business owners have told their insurers they would prefer to purchase, at a lower cost, fire policies without the additional terrorism coverage, according to Sorich.
He emphasized that the option only applies to commercial fire policies. It does not apply to automobile, homeowners or workers’ compensation insurance.
The newly signed Arizona bill is not unique. Sorich said 10 of the 28 states that have the standard fire policy in their statutes have enacted exclusions similar to HB 2192.
A number of other states, Sorich added, are considering similar legislation.
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