01 August 2017
The considerable rise in terrorism related incidences over the past few decades (particularly September 11 2001) saw terrorism exclusions placed on the majority of insurance policies, industry wide.
In 2003, the government attempted to remedy the situation by introducing the Terrorism Insurance Act 2003 & the Australian Reinsurance Pool Corporation (ARPC).
Historically, the protection afforded by this initiative has been limited to property of predominantly commercial nature.
That being said, on 9 March 2017, the Governor General of the Commonwealth of Australia released updated regulations applying to the Terrorism Insurance Act 2003.
The regulations have the effect of extending the ARPC scheme to buildings with:
The extension applies to contracts of eligible insurance policies commencing 1 July 2017 onward.
What does this mean?
In short, this means that a greater range of properties (within he above noted parameters) now have the protection of the Terrorism Insurance Act 2003.
In simple terms, in the event of a Declared Terrorism Incident (DTI) the Act will prohibit the insurer from applying any existing Terrorism Exclusions, allowing the insured to claim under the Strata Insurance policy.
How much does it cost?
As insurers will likely purchase re-insurance through the Australian Reinsurance Pool Corporation (ARPC), they will on charge a portion of these costs by way of a Terrorism Levy.
This levy is applied to the premium (before government charges) and varies depending on the Building Sum Insured and property location
Please contact our office should you have any questions.