Lessons from 9/11
A Second Disaster Strikes: Will FEMA Pay Again? - Know Your Obtain and Maintain Requirements!
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The magnitude of the Katrina disaster may not be known for many years, nor will the final audits and closeouts be completed soon. We do know, however, that FEMA's insurance requirements, particularly as they involve obtain and maintain provisions, will continue to be with us.
Lessons from 9/11
Until the 2005 Katrina disaster, the largest recent FEMA disaster had been the September 11th, 2001 terrorist attacks on the World Trade Center. By February 2002, the insurance implications of catastrophic disasters were given national attention and scrutiny by the testimony of then-New York State Superintendent of Insurance Gregory V. Serio, before the Subcommittee on Oversight and Investigations of the House
Lessons from 9/11
Until the 2005 Katrina disaster, the largest recent FEMA disaster had been the September 11th, 2001 terrorist attacks on the World Trade Center. By February 2002, the insurance implications of catastrophic disasters were given national attention and scrutiny by the testimony of then-New York State Superintendent of Insurance Gregory V. Serio, before the Subcommittee on Oversight and Investigations of the House
of Representatives Committee on Financial Services.
In his testimony, Serio described the market conditions that existed after 9/11:
In his testimony, Serio described the market conditions that existed after 9/11:
- "Coverage for acts of terrorism is no longer available for the largest commercial risks and its availability in the small and medium-sized markets is spotty and, where available, is offset by dramatic increases in rates."
- "This coverage...is now endorsed by terrorism exclusions and...premiums have dramatically increased...as availability in the traditional admitted market has declined."
- "Governments, too, are finding it either problematic to secure coverages or afford the premiums that are being charged."
- "Hospitals were the first New York business sector to experience significant difficulties in obtaining adequate and affordable property coverage for their facilities post-September 11th." (For example, on renewal, one NYC philanthropy operating several metro hospitals was able to obtain only 20 percent of the coverage limits of its expiring policy, experienced broad terrorism exclusions and a tighter "occurrence" definition in the renewal policy, and faced premiums three times higher from 23 insurers who
