AAIS Files Terror Coverage Endorsement
NU Online News Service, March 31, 3:25 p.m. EST?The American Association of Insurance Services has filed policy language for terrorism coverage on rental dwellings covered by dwelling and premise liability policies.
The endorsement, for use with AAIS's Dwelling Properties and Personal/Premises Liability programs, addresses property and liability losses from certified-terrorism events covered under the Terrorism Risk Insurance Act, the Wheaton, Ill.-based group said. The endorsement also includes provisions for fulfilling disclosure requirements under the act, it added.
The new language, the group said, is filed countrywide on a "file-and-use" basis and is available immediately for use in most states. But there are a number of significant conditions on the coverage provided.
First, the endorsement's provisions apply only if the Treasury Secretary determines that the terrorism reinsurance program covers rental properties insured by dwelling and premises liability policies, said AAIS.
The company said it has written to the Treasury Department for more clarification on this matter. Losses arising from "non-certified" acts of terrorism are not addressed in the endorsement, the group said.
Additionally, the endorsement states, no coverage is provided for any losses that would otherwise be excluded under exclusions that address war, military action or nuclear hazard. The insurer will not pay for any portion of a certified terrorism loss that exceeds the federal program's maximum annual limit.
AAIS said it is not filing a dwelling and premises liability terrorism exclusion for occasions when buyers decline coverage. Such endorsements have been widely approved for commercial lines, AAIS observed, but state insurance regulators have been reluctant to approve them for personal lines policies.
With this endorsement, "we want to give insurers a means to access federal terrorism reinsurance for dwelling and premises liability policies covering rental properties if the Secretary of the Treasury decides it is applicable," said Susan Luecke, director of personal lines at AAIS.
Property-casualty insurers not affiliated with AAIS can still use the endorsement after getting permission from the group. Interested companies can call 800-564-AAIS for more information, or contact Rick Anderer, marketing director, at richarda@AAISonline.com.
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