Insured-property losses from the Sept. 11 terrorism attack on the World Trade Center and the Pentagon are now estimated at $20.3 billion, up from the $16.6 billion that Insurance Services Office, Inc.’s (ISO) Property Claim Services (PCS) unit had reported immediately following the event.
The Sept. 11 terrorism attack is the costliest U.S. catastrophe ever, surpassing insured losses from Hurricane Andrew in 1992, which, on an inflation-adjusted basis, is estimated to be $19.6 billion.
PCS’s preliminary insured-loss estimate of $16.6 billion was based on claims information available at that time for personal and commercial lines of insurance. The ISO unit resurveys catastrophe losses, after issuing preliminary estimates, if insured-property losses exceed $250 million or specific circumstances relating to a catastrophe require additional analysis.
Following the re-survey, PCS’s revised loss estimates are as follows:
Insured property loss ($)
Number of claims
New York$20.3 billion
49,000 (30,000 personal; 15,000 commercial; and 4,000 auto)
2,000 (1,500 personal; 200 commercial; and 300 auto)
A full counting of insured losses in the aftermath of the attack was delayed by rescue operations and lack of access to the areas of destruction by claims adjusters. Much uncertainty still surrounds property claims activity, and so the PCS estimate is subject to change in the coming months.
The PCS loss estimate represents only property damage and related coverages, such as business-interruption insurance. The estimate does not include liability insurance, workers’ compensation, aviation property/casualty losses, and life and health insurance.
ISO’s PCS unit defines a catastrophe as an event that causes $25 million or more in insured property losses and affects a significant number of property/casualty policyholders and insurers.
PCS estimates represent anticipated insured loss on an industry wide basis arising from catastrophes, reflecting the total net insurance payment for personal and commercial property lines of insurance covering fixed property, personal property, vehicles, boats, related property items, and business-interruption losses. The estimates exclude loss-adjustment expenses.
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