Terrorism Insurance

Following the terrorist attacks of September 11, 2001, insurers backed out of the terrorism insurance market place prompting Congress to create a federal reinsurance backstop program in the Terrorism Risk Insurance Act (TRIA) of 2002, which also mandated that insurers make terrorism coverage available along with its property and casualty lines. This program was reauthorized in December 2019 to continue the program through 2027.

Advocacy

What is the fundamental issue?

Congress must reauthorize the Terrorism Risk Insurance Act (TRIA) program to ensure access to affordable coverage for commercial property. TRIA is next set to expire at the end of 2027.

I am a real estate professional. What does this mean for my business?

TRIA is a public-private partnership created to fill in a gap in the private insurance market and protect the nation's business sector by making available terrorism risk insurance coverage. If terrorism insurance becomes unavailable, commercial real estate borrowers could be in technical default of financing obligations.

NAR Policy on Terrorism Insurance

NAR supports the continued availability and affordability of terrorism risk insurance coverage under the TRIA program.

Legislative/Regulatory Status/Outlook

The Terrorism Risk Insurance Act (TRIA) is set to expire on December 31, 2027, and Congress has already begun holding hearings on its reauthorization.

On December 19, 2019, Congress passed H.R. 1865, a year-end spending bill that extended TRIA through 2027. The legislation made no substantive changes to the program.

Previously, following a brief lapse in authority in 2015, TRIA was reauthorized for six years with several structural changes:

Increased the program’s trigger threshold from $100 million to $200 million in insured losses.
Reduced the federal share of losses above the threshold from 85% to 80%.
Raised the mandatory recoupment amount from $27.5 billion to $37.5 billion.

Congress created the TRIA program on November 26, 2002, through Public Law 107–297.