Tracking Your Taxdollars: Terrorism Insurance

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Fort Myers and Cape Coral from space, July 1997.
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You’re paying for terrorism insurance even if you don’t have it. The federal government created it after 9-11 for people to protect themselves from loss in a terror incident. It was meant for the years directly following the attacks, but Congress has extended it through 2014. As an NBC2 Investigator Andy Pierrotti explains, taxpayers are on the hook for billions of dollars if another attack happens.

You need car insurance to drive, and home insurance to protect our largest investment, but do you have insurance to cover a terrorist attack?

Shortly after 9/11, the federal government started the Terrorism Risk Insurance Program. It covers damages to your home and health in the event of a terror attack.

“It’s a hundred billion cap, that’s in one calendar year,” said Scott Shaw, a Fort Myers insurance agent with Tim Shaw Insurance.

His office rarely has people asking for it.

“I haven’t had anyone ask for it, but it’s discussed because there is obviously a form they have to accept or reject it,” Shaw said.

Since it’s taxpayer-funded, residents in Southwest Florida and other similar sized-communities, subsidize the cost for big-city residents who face a higher risk of attack.

If there’s a valid claim, the government is responsible for paying 85 percent of it.

“In my opinion, this is the federal government getting involved in the private market,” said Congressman Connie Mack.

Mack says he’d eliminate the program if he could.

“This is a constant theme. Anytime it appears that to be a problem, then the federal government feels like it has to jump in and do something,” said Mack.

While the government would be on the hook for 85-percent of the cost; there are no numbers to show how many people have bought the insurance; and the U.S. Treasury Department couldn’t tell us how many claims have been filed.

Shaw says none have been filed in Florida, and that our state is at less risk than others.

“I feel pretty comfortable that we are not going to have anything that’s going to be declared by three government bodies of an attack of terrorism,” said Shaw.

Premiums run about $100 to cover a $300,000 home, but it only kicks in after total property loss from an attack totals $100 million or more.


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