What Protection Does it Offer?
While acts of terror are rare, their occurrence can be completely random and their results catastrophic. Since the 9/11 terror attacks, some providers have changed the way they approach terrorism coverage in their policies.
Along with certain natural disasters such as earthquakes and floods, your homeowner’s policy will not cover acts of war or nuclear releases. If you are in an area prone to certain natural disasters, you have the option to purchase additional coverage to protect against these events. However, additional coverage for acts of war and nuclear incidents is not typically offered since cost fails to adequately measure up to the risk.
Some providers have begun to directly address terrorism in their policies while others have not, leaving some policyholders confused on where they stand. The most important thing to do is review your individual policy to determine exactly what type of coverage you can rely on. Keep these things in mind while reviewing your policy:
- Acts of terrorism are not covered under a policy’s acts of war exclusion. In the exclusion section of your homeowner’s policy, it will state that you are not covered against war or acts of war. As commonly defined in the industry, the characteristics of an act of war and an act of terrorism differ to the extent that exclusions for war do not cover terrorism.
- If your policy remains silent, you likely have coverage. If your policy does not clearly state that it does not cover acts of terrorism, then there is a good chance that the damage caused by any such attack will be treated no differently than any other claim. If this is the case, check with SterlingRisk to make sure that your policy’s silence on the matter does, in fact, imply coverage.
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