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NEW YORK, SEPT. 5, 2002 - One year after the terrorist attacks in New York, Virginia and Pennsylvania, the ̽»¨¾«Ñ¡ Information Institute estimates that the total insurance loss from September 11 will ultimately be about $40.2 billion.

"9/11 is not only the biggest insured catastrophe ever, it is the most complex," says Gordon Stewart, president of the ̽»¨¾«Ñ¡ Information Institute. "The vast majority of claims for homes and autos have been paid, but commercial claims are more varied and complicated. While many have been helped, this recovery process will take years."

The I.I.I. estimate of $40.2 billion in insured losses includes:

• $11 billion (27 percent) in claims for business interruption;
• $10 billion (25 percent) in liability claims;
• $6 billion (15 percent) in property claims for damage to property, including vehicles, other than World Trade Center buildings One and Two;
• $3.5 billion (9 percent) in property claims for WTC buildings One and Two;
• $3.5 billion (9 percent) for aviation liability;
• $2.7 billion (7 percent) in life insurance claims;
• $2 billion (5 percent) for workers compensation claims;
• $1 billion (2 percent) in claims for event cancellation and
• $500 million (1 percent) in hull claims for the loss of the four commercial aircraft.

Companies that report claims information to the New York Department of ̽»¨¾«Ñ¡ indicate that more than 33,000 claims have been filed to date. Two-thirds of those claims come from commercial businesses, many in the Lower Manhattan area surrounding the World Trade Center site. These tend to involve property damage, business interruption and workers compensation. Thousands of claims have also been filed for life and disability insurance.

Most commercial property damage claims that deal with physical damage, particularly among small businesses, have been adjusted. In a few cases, the extent of damage to large structures adjacent to the World Trade Center, and whether they can be reoccupied because of environmental concerns are still being assessed. In other cases, decisions about replacing destroyed buildings have not been made, which affects the flow of insurance money.

Not all the anticipated liability claims have been filed. Many potential claimants are still evaluating whether to file through the Victims' Compensation Fund.

In addition, a number of business interruption claims, which involve lost profits because a business was closed for a period of time and/or additional expenses because operations were relocated, have not been filed or closed. This process has been slowed because many records needed to document the extent of loss were destroyed in the disaster. In other instances, businesses have moved to temporary locations and are still receiving payments under their policies. These claims cannot be closed until a permanent location is established.

In regard to the impact on today's prices, Stewart said that "since less than two percent of the loss involved personal property, insurance rates for the average American's home and auto, while rising, are largely unaffected by the events of September 11. Commercial insurance prices, however, have been rising sharply."

"Terrorism represents a severe new risk to our society. Individual insurers have to avoid concentrating their risks in areas where high profile buildings and large numbers of employees could result in enormous losses. While limited coverage exists, it tends to be expensive," cautions Stewart.

For more information about the impact 9/11 had on the insurance industry, go to /media/hottopics/insurance/sept11/