What are the chances that your aircraft will be involved in or affected by terrorism? Several aviation insurance companies are asking aircraft owners to answer that question within the next 30 days. Many owners this week received letters from their insurance companies offering additional coverage for acts of terrorism. The offering extends from the Terrorism Risk Insurance Act of 2002 (TRIA), signed by President Bush in late November. The legislation, in an effort to spur business investments, basically says that the government will underwrite claims stemming from terrorism until the insurance industry can set up policies for that purpose. Several aviation insurance companies now offer the terrorism insurance. USAIG, for example, is charging five cents per $100 of insured hull value for physical damages and $50 per $1 million of coverage for liability protection arising from terrorism. However, the aviation policies adopt language from TRIA that defines a terrorist act as, among other things, one committed by a foreigner who is attempting to coerce the federal government into changing its policies. Had Timothy McVeigh, for example, used an airplane to fly into the federal office building in Oklahoma City instead of blowing it up with a Ryder truck, damages or liability would not have been covered because McVeigh was a U.S. citizen. Greg Sterling, executive vice president of the AOPA Insurance Agency, noted that there is no set answer as to whether a general aviation aircraft owner should purchase the additional coverage. "It's like any other insurance decision. You weigh the risk versus the cost and decide whether the additional coverage is right in your situation," Sterling said. The TRIA coverage is not the same as war risk coverage, which covers a broader range of actions, including damage caused by riots and public disturbances, but also costs more than the TRIA coverage.
03-1-003x
