No TRIA Means Headaches For N.Y.

"Agents are concerned about their ability to place coverage," he said.

Because there is not a backstop in place, and Congress is not expected to pass an extension by the end of this year, some current policies may go without terrorism coverage as they overlap renewal periods, advised Ellen Kiehl, assistant executive director of the PIA Group, which represents New York.

Ms. Kiehl said another problem is that insurers will simply not write policies in New York because they feel it is a risk that cannot be written without the backstop legislation.

Sharon Emek, secretary/treasurer of the Independent Insurance Agents & Brokers of New York, and a partner at CBS Coverage Group, an insurance agency in New York City, said the failure to pass an extension would be felt among large property accounts during the Jan. 1 renewal cycle.

She said there will be a two-week gap during the renewal cycle, from Jan. 1-15, where insureds will go without terrorism coverage because there is no backstop or program requiring the coverage.

Due to the uncertainty in the marketplace, the result will be increased prices for insurance, she said, and reduced capacity.

She said insurers will not write terrorism policies in New York, without the backstop in place. The result will be a real estate market that cannot fully find coverage that lenders will demand.

"Because of the election, people are not looking into the future and are not watching what can happen," she said. "The public does not understand the economic fallout."

An insurance market that stabilized could once again be in turmoil, she noted. She said that before TRIA, property insurance prices went up as much as 300 percent, and that can have a ripple effect on the U.S. economy as businesses pass on their costs.

The consequences of no TRIA plan in place, she noted, are just beginning to manifest themselves as negotiations for renewals begin. She added that the current impact on pricing remains uncertain.

One problem, she said, is that whatever the outcome, when Congress comes back in mid-January and takes up the measure again, insurers and brokers will have to sustain a lot of costs in paperwork to re-issue new policies.

"This needed to be fixed in June," she said.

In terms of just getting property coverage, she said there are indications that the state's insurance department may allow terrorism exclusions added to policies to prevent the problems encountered prior to TRIA. However, there has been no definitive indication from the department yet, she added.

The department did not return a request for comment on the issue.