YOU ASK:

What is the definition of Terrorism Coverage?

WE ANSWER:

Terrorism Coverage provides protection against losses due to acts of terrorism.

This coverage used to be part of the protection provided by standard commercial insurance policies. However, after September 11, 2001, premiums for terrorism coverage have increased.

Terrorism coverage comes in various forms. There are coverages that will pay claims against being kidnapped and ransomed or against property being damaged. There are also companies that provide terrorism travel insurance.

Insurance companies have been concerned about the possible claims acts of terrorism can produce, since damage can reach millions or even billions of dollars. Thus, some governments have made the move to help insurance companies make the payments in the event that such acts happen. In the US, the 2007 Terrorism Risk Insurance Program Reauthorization Act was passed to address the need for insurance companies to lessen their exposure against the risk on terroristic acts.

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