May, 2013 - On Thursday, May 23rd, United States Representatives Mike Capuano and Peter King introduced the “Terrorism Risk Insurance Program Reauthorization Act of 2013” (TRIPRA). This legislation, if enacted, will extend the Terrorism Risk Insurance Program for ten years.
As many commercial property owners know, in light of the terrorist attack on September 11, 2001, the insurance industry announced it would no longer cover terrorism claims due to sustaining over $40 billion in losses. This was a blow to the commercial real estate industry making it increasingly difficult for property owners to manage or acquire properties, or to refinance loans. Congress responded and TRIA was enacted in 2002 in an effort to establish a federal backstop for commercial property and casualty insurers arising from terrorism. The Act required property and casualty insurance companies in all fifty states to offer terrorism insurance coverage when they underwrote property and casualty insurance. TRIA also requires companies to offer terrorism coverage to commercial property policyholders as well as requires private insurers to cover losses capped at $100 million. This measure has been extended twice so far and will expire in 2014.
This piece of legislation acts in conjunction with the recently proposed legislation, H.R. 508, or the “Terrorism Risk Insurance Act of 2002 Reauthorization Act of 2013.” In February of 2013, Representative Michael Grimm introduced the bill with 30 bipartisan co-sponsors.
IREM supports and encourages the passage of this important legislation. The bill’s passage is essential to providing coverage for events related to terrorism and war. IREM will continue to lobby for enactment of TRIPRA as well as the reauthorization of TRIA.